Stocks for the Rest of Us
Posts tagged trading range
Stock Market Rally Warrants Caution
Nov 26th
If you’re long, consider being less long. We’ve rallied hard off the last bottom and that kind of move warrants caution. If you’re in a long only portfolio, consider hedging yourself with some SDS. Here’s why. We’re currently moving up into what I like to call the “Dear God Please Let Me Out” range. This is the range where traders bet incorrectly that we saw the bottom on October 10th and were in a panic as we blew right through that previous support around 850. Now that we’re back around 850 those people want OUT and we will most likely start to see some resistance as the holiday trading subsides and the big boys come back to the office on Monday. As a side note we’re also approaching the 50 day simple moving average which will be natural resistance to anyone looking at a basic chart.
Dear God Please Let Met Out Range
Stock Market Stuck In The Trading Range
Nov 12th
The stock market is stuck in a trading range and right now wer’re at the bottom of that range. Unfortunately, I’m starting to feel that everyone knows about the range and is already trading around it. I would be careful picking up stocks here. As I mentioned in my previous post the financials are seeing new lows and the market overall could follow. If you’re short, I would cover. However, I would wait to see if a bounce develops before going into any long positions.
S&P 500 trading range
Financials Appear To Be Leading The Way Lower
Nov 12th
Considering that the finaicials are at the epicenter of this crisis one could assume that they will lead the market in whatever direction they go. Unfortunately, right now they appear to be heading lower. While the market overall is holding those October lows, the XLF, the financial sector ETF, is breaking to new lows as I type. This is very troublesome for the market and because of this I’m leaning more towards breaking those lows rather then bouncing off of them like I previously stated. Rather then jumping in expecting the bounce I’m going to wait to see if a bounce develops. I’d rather be safe then sorry.
Sell Into The Rally As We Approach Resistance
Oct 31st
As I mentioned in my last post I had increased my long exposure as we bounced off the old lows around 8000 in the DOW. I picked up various commodity names, some retailers, banks, and tech stocks and I’m now looking to unload the bulk of them as we approach 10000 in the DOW. At this point in time there’s really no evidence to suggest that the trend is starting to turn around and this is anything more then a bear market rally. At the very least I would consider putting on some hedges in the form of short ETFs as protection in case we visit the lows once again and approach the top of the current trading range. If you’re greedy you can hold on for a little bit longer but in this market greed will get you killed.
S&P 500