Shaky Finish! Once again, the relief rally we had two days ago is erased from our memory and we are back where we were pretty much the day before last Friday. Some can argue that having worries is good and it's called "climb a wall of worry". We definitely have some cause for worry these days and it's mainly because of the dreaded "interest rate talk" and resulting jump in the 10 year bond yield. So, now we have the worry and ask can we climb this? Theoretically, yes we can. Technically, it's going to be very tough if we don't have any near term positive catalyst that can drive this market higher. So, we are definitely feeling the heat both from the market and from outside our air conditioned environment. The key to cope with both kind of situation is to stay cool, and very cool we have to be.
Well, our strategy in this kind of market is 1. We trade very short term and use technical signs rigorously. 2. We only trade those that are making new highs or are in a setup to do so 3. We stay very liquid and will not make any sizable bets 4. Hope is the word we are taking out of our vocabulary which means we only trade on what we see out there. Basically, you can get the idea that the last thing we want to do at this point is to turn ourselves from traders into investors. You'd be surprised that how many seasoned traders can fall into the trap with just one little slip. We just have to stick to what have gotten us to this point and we are taking many lessons from the past summers into incorporating our strategy.
here are some stocks of interest...
KMGB/LPHI, as much as we've liked the recent action from these two, we've felt compelled to part way with most of our shares as the major indices deteriorates and while there are profits to take this week. This market is not about hoping but rather acting on better probabilities. At this point, this market feels about as uncertain as it gets. With last Friday's low looming around the horizon, we just don't know if the next push will send it lower and spark some more nasty action. This is not a calling the top shot for these stocks but rather it's just our own defensive and mechanical maneuver to take some good profits in a murky market environment. We are very glad that these two stocks held up well enough to provide us with some very nice gains. Of course, if market gives us clear direction that it's headed higher, we'd be sure to have these two back on our priority trading list.
CROX, this is the same story as above except this one has served us much better and much longer. This one has got everything you can ask for, liquidity, chart and a hot story. We don't know how much of the rise lately is due to the up coming split but we feel if we don't sell some more here, we'd just be asking for it. We are still keeping a little and will see how much more it can take us at this point.
RCCC, we guess something has to shine in this market and this unlikely hero is there to give us a reason to get up early tomorrow and trade. We'd think some of our other uneventful stocks such as MFLO VSNT TRCR etc. may become the "unlikely heroes" in this uncertain market. We just have to keep a close eye on those day in and day out. MFLO is a dime off a NCH and we picked some up today.