Today was a market trading day. For new and developing traders this is a very difficult trading day to master. Normally we focus on one or two stocks that are best for us and find set ups that make sense for us. On a day like today, a market trading day, you want to apply a different technique. Let’s discuss.

The market showed us her weakness below 132 SPY. Congress still has not resolved the debt ceiling issue, which brings that dreaded uncertainty to Mother Market. The market can punish uncertainty. Quickly if Congress does not resolve the debt ceiling issue almost all economists predict an economic calamity. Those that disagree with this analysis are at best know-nothings. As a professional trader I say clearly: the markets need this issue resolved.

Scrap the just trading JNPR idea on a market trading day. As I went over the trading reviews of some of our traders many were in 5xs as many stocks as normal. They were concerned they traded too many. I was trading ten stocks at a time when I can go many a day trading maybe three in total and one at a time. On a market trading day like today you search and you search and you search for shorts. Find a set up that makes sense to you, set automatic stops, and look for the next opportunity short. Do the best you can browsing how your positions are doing, but there is no need to watch every tick in a stock.

Short a bunch of stocks, set your stops, and watch how they trade. Look for more stocks to short and watch them trade. Those that are working best should garner your attention. Lighten up on the others that are just not behaving well. Search and search and search for the next excellent shorting opportunity.

Today I attacked the markets looking for the weakest stocks to short. I was short AET, WLP, RVBD, MMM, ILMN, and others. I started small positions, watched the stocks trade, and then found areas to add responsibly so I could control my risk. ILMN and WLP received more of my attention as I learned they were especially weak.

I could have attacked the markets today by searching for market stocks and trading them. Wait for market stocks to get near excellent risk/reward levels, short them, and let the market weakness deliver them lower.

Also you could concentrate on SPY or the futures.

A super weak market trading day like today you do not know what might start working really well on the short side. I did not see RVBD coming today. ILMN? That weak really? So it is better to get a feeler position for small size in many more stocks and be in them. It is easier to feel a stock’s weakness when you have a position. Give up trading them as well as you can for other potential opportunities that just might follow because of market weakness.

Tomorrow I will focus on the SPY 130.70 level. Below this support level and we could find 129.60 our next important support level. Above the 130.70 and I am not sure about great R levels until 132.

Gotta go rest up for tomorrow’s session. Check out our last blog for some trading ideas.

Bella
One Good Trade