Tuesday, March 2, 2010

State of the Market - 3/2/10

We saw a mixed day today on Wall Street, as stocks opened slightly higher but could not move any further and chopped their way sideways for most of the session. They tried to break to new highs and really get moving in the early afternoon, but around 2:00 started selling off and did not close well, although they did still finish with very slight gains. Volume appears to be the same as yesterday - a good bit lower on the S&P but strong on the Nasdaq.

Technically, it is a bit worrisome to see the Dow and S&P lag the nice action in the Nasdaq for the past two days, both with price and volume, but perhaps I am making a bigger deal about that than needs to be made. We'll see I guess. The Russell 2000 barely broke to a new high today but could not close with one. I am sensing we could use some rest in this area, but it is not a given. I am a little more hesistant to chase longs after the past two days but am definitely not looking to short. Bulls are still in control for now - they just may pullback here a little, that's all.

I had one of those days today that just makes me not want to trade for much longer. I had basically six stocks (JADE, SEED, CGA, USEG, MERC, NFP) on my watchlist today and planned on entering a few of them. I thought SEED had a chance to pop just because it hasn't done much lately and it seemed due so I put it on there, but I wanted to see a little strength first. MERC was a setup from the video this weekend, as was NFP. USEG and CGA were from my scans last night. Anyway, I went into JADE at $2.87 a little after the open as an earnings play - it is the type of stock I felt could run if it got some momentum. Unfortunately, it didn't do much of anything after the opening gap. I also entered NFP at $12.00 as it broke above its flag and posted very heavy volume in the first ten minutes of trading. It also did very little after its initial pop.

I kept watching SEED but it did absolutely nothing for the first fifteen minutes of trading and I ended up shutting the quotes off around 9:45 due to my job - I can catch the opening few minutes on my break but that's it until the end of the day. I ended up also passing on MERC - I don't know why exactly. I guess it ran a little too quickly for my taste and volume wasn't as heavy relatively speaking as NFP. Of course, SEED took off almost immediately after I shut the quotes off and had a huge day, as did MERC - the volume there came in around 10:15. I was in neither and in hindsight, probably couldn't have done anything about it.

This type of day is so frustrating - out of all the stocks out there, I had two of the biggest winners of today on my screen at the open. I obviously can find good candidates or I would not have had these and others this week move like they did. For some time now, however, I just don't get in the ones that move higher. It seems like I inevitably pick the ones that don't do anything and skip the ones that move much higher. All four stocks looked good today - why did I go with the ones I did? I don't really know. I almost feel cursed or something. Missing SEED feels like just bad luck but it hurts nonetheless. Anyway, I am quite ticked off right now. It is what it is and I'll get over, but today was not fun. Sometimes it just takes one good trade to get you over the hump so to speak and those were two trades that had that potential.

We'll see what tomorrow brings, but I am leaning more to a little pullback. I fully expected a strong move up once the 50 day moving averages were reclaimed, and I don't that I would call the past two days overwhelmingly strong. The Nasdaq has performed well, but the other indices lagging is weird. Maybe it doesn't matter - we'll find out soon. I will still consider longs as opportunities become available, but I don't think I will be super-aggressive at this moment. I want to see if either of my current longs get moving before doing much else. Take care and good luck Wednesday.


marino77 said...

sorry about your SEED & MERC -
but it's a great illustration of why it is difficult to be a part time trader -

positiontrader said...

Hang in there Mac! One thing I have learned to do whenever I miss an opportunity like this or leave too much money on the table (just happened yesterday) is ask myself at the end of the day that if I were to face the exact same situation all over again, would have I acted any differently? Most of the time the answer i no and that removes all frustrations associated with missing out on potential profits.

And I was in a similar trading rut a little while back and surprisingly, what got me out was not making a few trades. The point is you never know what could get you out of this rut and it could happen any instant.

Good Luck!