Waiting..
Wednesday, January 12, 2011 at 07:50AM
Demi/ YourPersonalTrader in FOSL, ININ, LULU, PVH, TIF, WLT

An important end-game in trading is not to overthink, contemplate every whipsaw intraday.  This is the ‘space’ we are in (SPX 1260-1280) and a 6bln ES trade that supposedly spooked the market quickly intraday is really just a boring market looking for an ‘excuse’ to sell…”As 1280 invokes ‘R’ for the past week, the market impulsively sells off here and will continue to find an excuse to take some profits”. DJIM#2.   Don’t look too far into reasons for a swing intraday such as today’s unless there is a worthy newsflow headline.   It is what it is….. as seen by the volume decrease from last week and that is a market awaiting earnings and/or a bad sovereign bond auctions coming up (shorts futile hope).    An illiquid market will exaggerate any move, so look at Shadowlist if individual stocks are moving with the SPY/ ES to gauge the significance.  Up or down.   Clearly, today single stocks did not follow the steep drop.   Add the ‘blizzard’ for Wednesday in NY + long weekend ahead and nothing will likely be decided till earnings get rolling post-holiday.

In all,  if some profit taking around 1280 is the game,  get cash ready to use for new earnings plays in the coming weeks instead.  This is also one way to avoid any correction, if one comes in 2H January.

Shadowlist

Article originally appeared on Your Personal Trader (http://www.yourpersonaltrader.com/).
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