You have to respect what this market is capable of. Also, we are crystal clear on what sort of market news this market does not like. As we have said before, as long as there's no heavyweights that can tip the fine balance of this market, we should be ok. However, if there's enough market moving negative news coming out in a steady fashion, even the most bullish case will have to be shoved to the side, for now. It isn't pretty out there and we really have to raise our cautionary flags a few notches today. Market has been very volatile lately and unfortunately much of the volatility seems to weigh on the negative side. It's been bad..good..bad..good and today it got ugly. We all can read about it elsewhere, we had some prelim numbers on AAPL's iphone biz premkt and then we supposedly had the entire market on CFC's CC of 3 hours taking us down late in the day. Earnings are not stellar and there is fuel being added with the housing, sub prime hourly reports. AMZN up 12 bucks AH and maybe others, including AAPL AH's can give us some reflexive bounce action soon. At this point as we said this weekend in the charts, the lines are drawn in the sand on the indices and today the NASD cut one to start. We'd be selling holds into any strength now, unfortunately..many will be thinking this way. Tomorrow is probably the busiest EPS day with many S & P co's set to report, willl we get some reprieve or will focus shift further after CFC into the ECO/ housing #'s out tomorrow. There are a few small cap reports that aren't getting the attention they might otherwise, despite AMZN's move tonight. We'd just say be a little more careful now if a stellar report comes out on a micro/ small as the interest might not be as we are accustomed to. So watch the chasing of the gap if one comes along. We'll see...volume will always tell the tale.
At this point, we'd like to stick with the more predictable plays as oppose to wager on a bullish market to bail us out on some of the potential setups. Ok, some companies have reported some nice earnings but they are also prone to be vulnerable to severe market sell offs. We are back to a stance of taking a wait and see mode on new buys. We've talked about only using the morning calls, early action if any, as in indication if to trade the TBSI, DRYS on a particular day lately. Today, clearly was what we feared if you were holding these overnight. TBSI was ugly late in the day as the cries of all overboard were heard on this shipper.
We basically want to see which plays can emerge as potential winners when things do settle down.
Today, a few probably got lucky by selling off the DDUP, AP first thing in the morning as it turned out. For stocks trading this thin..market orders, stops are usually suicidal. We've seen both of these stocks bounce nicely in the past few days after such action. Watching a stock down 2 bucks on less than 50K early volume is simply a few causing a stock to falter fast. Best to sell into positive action, you'd get a better price yesterday than fleeing early as today in most circumstances!. Most circumstances are not -200/50 point days.
CRNT, this is probably the only predictable thing on our screen today, despite a downgrade. It's predictable as in a sense it's being played for a potential high ranking IBD100 debut. Too bad we didn't start earlier than today as on other plays where the potential % return leading to IBD listing was much greater, such as GTI, NGA. We'd be playing this one aggressively as long as the mood is right with it.
Bottom line, we want to have a clear vision when it comes to trading and we aren't getting any today. It is best to protect the capital at the moment and let other market participants sort out the mess. There will be opportunities when things get settled down.