Monday, August 4, 2008

Taking a Break for a Few Days

No regular summary tonight - based on today's action and the schedule for the rest of the week (i.e. - the Fed meeting) I continue to see no reason to trade this market right now. So therefore, I am going to take a few days off from blogging and hopefully return this weekend. I think it is a perfect time to do so. Typically, trading gets very passive and slow before the Fed decision comes out, and then crazy after the decision is announced - not the best environment to put swing trades on. That, along with the range-bound market we are in and the summer season, tells me that I am not likely going to miss a whole lot. I will still be around doing my scans, and if I see any really nice setups on either side of the market I will post them, but I just don't expect that right now.

I still lean bearish here - nice-looking stocks just aren't acting right in my opinion right now (I hope you listened to me about VISN on Friday and why I was staying away for good from it). I would look to get more short than long, but I think it will take us breaking lower out of this range for shorting to work well again. I don't think shorting here is a good risk/reward with the Nasdaq being down three straight days. Since very few longs are setting up or acting well, it means the best thing to do is sit on your hands and wait for this period of uncertainty to get past us. It will happen eventually - we just have to wait for it.

Best of luck this week if you are trading - I'll be around, so feel free to shoot me an email if you have any questions or comments. See you this weekend.

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Anonymous said...

Hi Mac!

I am the same guy who messaged you about WEL yesterday. Awful chart today!!!! So, I think I know how to buy them and have a fair idea when to sell them but have no guts to pull the trigger!!!!!!! I knew I should have sold it when it fell back to the previous high/support of 2.66 after touching 2.77 but I just couldnt get myself to doing it!!!!! Luckily, the AH results are simply awesome and it should go back again tomorrow but am just so mad at myself. Just thought I would share my rant with someone!! Thanks!! Enjoy your rest!

Gio said...

Come back soon Mac! I need yah. In the meantime, I'm going to write a post on iBC about position sizing... If you're not doing anything, can you contribute? You seem to know when to get in, get out, keep it small, and keep it cash quite well. I just need a swing trader's perspective. I'm gonna ask Stewie (the impatienttrader) about day trading position sizing. should be good stuff. anyway, enjoy the break, but don't keep your eyes of the market! I'd hate for u to miss a beat.


Mac said...

Anon - that chart is ugly right now. That's part of the problem I have playing really low-priced stocks like that. As for getting back in - that's your call.

Selling is definitely the hardest part of trading - knowing when to get out. I would rather get out early that hold on too long, especially with a loss, but that's just me.

Gio - I'll be around so feel free to email me. I just don't think it worth posting much right now when I have basically been saying the same things for the past two weeks. I am going to keep an eye on things but I can't see myself getting back into the market this week in a heavy manner with the Fed decision.

I will say that after my scans tonight, I am more bearish and have a feeling we could be in some pain soon. I have too many stocks up a huge amount in too short a time, and I still think commodities bounce soon, which could put pressure on the overall market. With this market, it's hard to tell - I will probably be totally wrong. I see very few longs and a lot of possible shorts IF they break down. I'll be watching, just not too intently.

Let me know what you are looking for in terms of position sizing. If you have more specific questions, I can probably help. Good luck.

Anonymous said...

Good to see you taking a break Mac. Not many charts setting up. Any thoughts on XSI? One of the few stocks popping up on my scans. Look forward to your return.


Mac said...

Thanks Scott. I am open to a rally and am still watching things but I could not find anything to buy today and continue to see very little out there. I am expecting a downturn soon but this market makes no sense, so who knows?

XSI has very nice BOP but is low-priced and thinly traded - not a good combination from my perspective. I would imagine it would just be too difficult to trade. If it rests, it might work.