The stock market did yesterday what they have not been able to do all month. Produce a solid follow through by two trend days up back to back. Now that is impressive since it does not come along very often. Perhaps the fact in the latest AAII poll only 19% of the participants are bullish!!! You can never underestimate the power of being a contrarian. Its perhaps the best indicator out there for short term market direction.
We are now about 30 min before the open and the market is looking like another gap up albeit only .15%. Peanuts compared to the last two days. We are still in positive seasonality approaching a holiday weekend but the market is rapidly approaching short term over bought. So what is one to do.
My self its only very short term swing or day trades for now. I did hit a nice one yesterday trading DTO for what turned out to be a 5 min trade and +$500.00. The setup was one that I accidentally came across taking a look at the 5 min crude charts. Its a setup that rarely happens but when it does its a very high % trade. Typically it takes longer then 5 min to play out but sometimes things work exactly as planned with no fake outs or wiggles. And this was one of them. About a min after the trade was put on crude took a sharp dive. And my exit happened to capture almost all of the move. It does not always work out that way but I will take it:)
I have a small position short in 2 stocks that I have had for awhile now and are rapidly approaching my stop area. Any continuation to the upside most likely will trigger the stops. But as they are in puts that do not expire for another 30 to 45 days away the loss is manageable. Also they have not triggered yet!
So today its looking for one or two short term setups and forgetting about medium term swing trades for now. There is just too much of a headwind to think a 3 to 5 day swing will work out well right now.
I have been asked for some sites that would be good to get introduced to trading techniques. There are so many out that are both good and bad. In addition trading real time and reading about trading techniques are completely different. But I am going to put together a list very soon with links to the sites I feel are the best out there. They all will be free sites that provide valuable education for a someone that is interested in learning about what they should be thinking about when trading. It may surprise you:)
If you wish to follow my trades join me at @rickjswings. It’s my private twitter feed and is free for the time being. Until I have more time to devote to the stock portion of this site it will remain free. My private trading and the handicapping portion of this site are taking up quite a bit of my time. I refuse to charge for something I cannot devote a substantial part of my energy too!
Good Luck Today
RickJ’s Handicapping Picks