Wednesday, March 16, 2011

Market undoing yesterday's bounce

Another day with lots of red on the screens. Stocks attempted to put in a rally, with some intraday breakouts as a result. But soon the tide turned, only to go lower again for the third day in a row. Yesterday's premarket low got broken as if it wasn't there, S&P reversed @1250. Next support on the charts: 1225-1230, so basically we are now in no man's land. Oil, silver, gold all started the day well, but only oil could hold on to some gains.
The dollar managed to finally gain some ground on the euro, for the first time in 5 sessions.

Today I sold my remaining shares in NUVA. Yesterday the stock behaved weaker than the market, today it was the other way around. I didn't want to watch it go thru my stoploss so I sold with an average gain of 3.37%. I'm flat now and not looking to swing anything as long as the dust hasn't settled.

Only one daytrade today. Once the market started turning, I didn't feel like getting envolved again and watched it from the sidelines. A very news driven market here and so very volatile!
I went long POT after noticing an inside bar on the 15m-chart. I saw it rather late but got in anyway at 55.25. My first target was 55.75, next 56.50. I took 1/3 off at 55.75 and raised stops along the way. The stock started topping out and I raised my stop, leaving it just under the long red doji that followed the inverted hammer. Price went down quick and I sold the remaing 2/3 shares at 55.46. Not a big gain, but well traded imho (except maybe for the late entry). Here the 5m-chart:

In the afternoon the selling stalled, only to form bear flags all over the charts. I especially got interested in MOO, the Agribusiness ETF. It looked like a reasonably good short setup, but I didn't take it. Regrets, I had a few...

At that same moment Stewie recommended to get in TWM, the inverse ETF for the Russell 2000-index (IWM). The chart looked more like a short setup, with a lower high / lower low so I didn't take the trade (see white square). As you can see on the chart, I was wrong to doubt Stewie! He got out, just before his target of 49 got hit!

Let's wait and see what tomorrow will bring. No predictions on my part, all will depend on how the situation in Japan evolves (and then there also is Libya, Bahrain, Spain banks in trouble etc.)
Except for my market hedge (more info at the end of this post), all in cash for now!

And finally, I suggest an interesting article by chessNwine: 'They Shoot Bulls, Don't They', a must-read!

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