Market leaders are the last stocks to bottom. They have the strongest fundamentals and don’t breakdown until the pressure to get out of the market becomes so great that even they will be sold. One such market leader is AAPL. We talked about AAPL in today’s AM Meeting. I remarked that we should pay close attention to AAPL’s price action … Read More
Expect The Unexpected
Today, from 12pm to 1:45pm the SPYs trended down very steadily from 87 to 83.5. There was a readable seller for the entire downmove. When the SPYs attempted a reversal it failed around 84.6. This led to a downmove to the low of the day at 83. I was able to make a nice chop in the steady downtrend. But … Read More
The Box vs. The Big Picture
I was at the office Sunday doing some admin stuff and working on some trading prep for this week. One of our senior traders was at the office reviewing some trading videos as well. He had a question for me about how he could trade the large reversals we have been seeing in the market more effectively. He is a … Read More
Find the Easy Plays
Trading is a tough profession. Every day you need to figure out a way to make money. During the first couple of years of your trading career it is important to be in the easiest plays. One such play involves getting long above a recent support level in a stock. The more recently the level was important as support the … Read More
Make This Trade
Goldman Sachs (GS) is significantly weaker than the market right now. Just a few examples: On October 29th after having rallied strongly for two days it gave back almost all of its gains in one day; as the S&P has consolidated and shown strength the past few days GS has sold off sharply on negative chatter; it dropped four points … Read More
AAPL Earnings—Oy Vey!
As you gain more experience traders develop biases about stocks and where they should be priced. Often this is helpful. At times it can lead to potential rips. As an experienced trader I have learned that my biases must be verified by the Box, the price action in the stock. Who am I to decide where a stock ought to … Read More
Fear Establishes Bottoms
One thing that I realized a long time ago was that emotions/psychology are what determine prices of stocks in the short term. The average stock on the NYSE fluctuates 50% in any given year. Does anyone really believe that the fundamentals of each company gyrate to the extent necessary to justify that level of volatility? (maybe in this environment but … Read More
Current Market Conditions
This is the weakest market I’ve seen since 2001-2002. Mike and I took many extended vacations in 01 as it was far more profitable to be on the golf course than trade a market that severely limited our ability to short stocks.The good news is that unlike 01 we now have the ability to trade both sides of the market. … Read More