Another strong day today on Wall Street, as the bulls fought back from a bad open and managed to push stocks up again for large gains by the end of the session. The first hour or so of trading had a negative bias, but around 10:30, stocks put in a low and climbed there way back to flat for the day by 2:00. From there, they moved sharply higher all the way into the close with the Nasdaq leading the way. Volume appears to be lower on the S&P and higher on the Nasdaq.
Technically, another higher high was put in today by both the Nasdaq and S&P, with the Nasdaq breaking to new highs for the year. So the beat goes on for the bulls, and besides being overbought, there isn't much to signal a possible turn coming. I still want to see volume increase on days like today (it did not on the S&P) and I am a little worried that there are now 43% bulls and only 34% bears in the latest Investors Intelligence survey. We'll see if that means anything at all - it may not. One more thing that I am watching is that we are approaching having only 200 stocks down more than 25% in the last 65 trading days. That is usually a sign of a possible turn as well. It may be coming, but I have no clue when, and it has already gone much further than I expected, so I am not going to make a guess.
The beat went on for me today - more terrible results and I continued to be very frustrated. SOLR broke out nicely this morning and followed-through from yesterday's action, so I let it have a little room. It got as high as $7.90 and I set my stop under yesterday's highs around $7.30. Well, because I owned it, it promptly sold off that follow-through and fell right back down, giving up all of its gains and hitting my stop at $7.27. I basically broke even on that trade but gave up a decent sized profit on the reversal. That was fun. Bottom line is the stock didn't act well today and I expected a lot more.
When I saw the financials gap up today I had the same feeling I had when I saw them gap down yesterday - to fade the gap. So as a hedge on my long position, I entered FAZ at $9.83 early in the session. I'll let you guess what happened. Stop was hit around $9.56, giving me a 2.88% loss. Fun stuff as always for my trading account. This turned out to be a blessing as it fell the rest of the session but bottom line is that I shouldn't have made the trade.
In addition to the poor results, I was so frustrated that I turned off my quotes for the rest of the day and missed some nice moves in stocks I was watching like GAIA and CAEI. I keep expecting to get my groove back but it is just not happening right now. It will happen eventually, but right now, I am making the same mistakes over and over and not adapting my trading to this market.
Since I continue to have little success right now, I will not be trading tomorrow. Sometimes as a trader you have to admit when you just don't have it, and right now I don't have it. With options expiration on Friday, that might be a good decision anyway. If I had longs, I would just manage them because this market continues to act in a bullish manner. Sure, we could turn here soon, but trying to guess when that will be could get you in trouble. Take care and good luck tomorrow.