Wednesday, April 27, 2011

State of the Stock Market - 4/27/11 - "Be a Little Cautious"

I went into today with almost TOO many long setups in my scans (which always worries me).  Today, I saw very few if any of those setups move higher and I actually saw a good number of stocks lower today.   On a day when the Nasdaq was up 20 points, that is a bit worrisome to me. 

The action overall is obviously very bullish with the Nasdaq and S&P moving to new highs for the year, but I would be cautious at this particular juncture if you're not already aggressively long.   I have had some positions stopped out today and am down to two long positions from six yesterday.   I won't hesitate to put new ones on if they trigger or if they are earnings-related (which continue to work well), but just remember that when the market seems easy, things usually change quickly.   There is nothing wrong with taking some profits as you get them or at least tightening stops on profitable positions as they move higher.   Good luck Thursday.

4 comments:

Anonymous said...

hi mac

no problem of too many longs, i understand the pressure of too aggressive but sometimes the overbought may only brings early morning correction (intraday). i suggest to ignore short term correctoin and hold them for the final rally before QE2 ends.

for those stocks entering the overbought zone, let it skyrocket, but maybe take some profit if indicators goto extreme overbought. or, mac, beware the next week if there is another crazy rally.

richard0028 said...

Agreed, on a day the indices were up, many leaders were pasted. Caution Will Robinson......

Clay Franklin said...

Thanks Mac,

"but just remember that when the market seems easy, things usually change quickly."

This is a great reminder for me as I ease back into the market after a decade hiatus.

With RAX I wonder if to keep it long term, take out the initial investment or buy more. I held it since $17 through all the ups and downs. Same with SNDK in at $21. Long too many for sure and disappointed in many like UA, SLV, BEXP, GMCR and IL. Recently into GOOG and AMZN for long term hopefully :-)

I think I should also start using stops to protect the capitol and quit buying into earnings.

Eventually I will change my sleeping habits and get up for when the markets open instead of sleeping in PST and do some swing trading like you are doing.

@Clay

Anonymous said...

"beware the next week if there is another crazy rally"
hi mac, thats from me, mini-me

problem to post reply here before.

if dow rises over 55~65points today then i will probably square 1/3 long positions in order to have good sleep during weekend.