Friday, September 11, 2009

State of the Market - 9/11/09

We saw a day of rest today on Wall Street, as stocks paused after six straight days of gains and pulled back quietly in light trade. Even with the slight pullback, the indices finished off their lows and once again, in the face of overbought conditions, there were no strong bears to be seen.

Technically, another three or four days like today would be very bullish and could allow this recent move to continue north. There is little doubt that the market could stand to rest for a few days as that is healthy but who knows if that will happen. As I said yesterday, we are at the top of wedge-like patterns so the technical setup for a pullback or at least a rest is there. The bear flag setup in the financials still looks valid after today although MS (one stock I've been watching) did get above its 50 day moving average today. Basically, the technical picture I painted yesterday is still valid, so you can check out yesterday's post for further analysis.

My trading day was "fun" but brief. I posted the list of stocks I have been watching recently and one that was on that list and that I have consistently mentioned here over the past few weeks is CVGI. Well, today it was strong very quickly at the open and I entered a position around $5.10. This was slightly below resistance but I thought it would bust through and move to higher ground, so I went in a bit early. It did run through resistance at $5.20 and got as high as $5.37 before settling down a bit. I then set a trailing stop, which put my stop level a little under $5.00. I was ready to let it run north but also realized it could reverse and didn't want to see it get below that level. I felt that was a pretty reasonable cushion to give this stock after breaking above that resistance. Being back at work, I also cannot just not set stops as my eyes aren't on my computer screen but for a few times per day.

At 10:05, I have a strong feeling that my trailing stop (which isn't supposed to be seen) was simply run as there was a massive spikedown over a few minutes which took me out between $4.93 and $4.89(the low of that spike). I don't have the one-minute chart so I can't check how quick the drop was. After this quick spike down, it bounced right back into the heatlhy consolidation it was forming and ended up moving higher throughout the day. I was done after this and made no trades from there, as nothing else was moving anyway.

Hopefully some of you were able to benefit from this setup as it does look like it has potential to run, but I am just continually frustrated. My scans continue to pick up the vast majority of the stocks that are moving in this market and I have posted many here before they move, but I am not catching the moves myself for whatever reason - bad trading, fear of losses, bad luck. I for one will be very happy when 2009 is over. It just continues to seem that whatever I do, it is the wrong thing this year.

It is the weekend, and I am done complaining, especially on an anniversary like today when so many people lost something so much more important than money. A bad trade is beyond trivial when you remember what happened to our country on 9/11/01. God bless those families who continue to mourn loved ones lost eight years ago today. Take care and have a good weekend.


Anonymous said...

Stumbled across your site. I can relate to your trade. My telecharts is up in October and I'm thinking of just dropping out altogether. Since I'm a EOD trader my stops get repeatedly run before the stock takes off....

Mac said...

Well, it has been frustrating but it's not Telechart's fault. I just think it has been extra volatile and very difficult to hold positions based on normal logic for more than a few days. It seems like you have to be a daytrader to be successful. The ones that I "follow" that are finding success are simply daytrading things. Even the big winners this year (FUQI comes to mind) has shown many sell signals based on volume but just continues to move higher. I would love to know someone who held the entire move there.