Here are the collective musings, warts 'n' all, from a couple of active short term/position traders. We'll endeavour to post as often as possible and in as timely a manner as possible within the normal constraints...hope you might find the odd nugget that brightens your day or enlightens your trading activity. D
Market Thoughts: 27/10/2005 11:02 / Yesterday’s Nasdaq dump initially sparked by AMZN’s big decline shows the challenges of attempting to play this market in the short term frame. We added three new names : MSFT at 25.15 peaked at .33 on a –BE H, but held quite well at the close; ADBE at 33.19 peaked at 33.64, closed 32.88, SP (20c maximum pain)) hit 32.99; AMGN 76.29 gave up most of Tuesday’s gains and here we should have played it as tight as ADBE; our 50c max pain threshold was hit; CHK we did call right as energy reversed intra-day and we closed at 33.11 (+1.91) prior to a 32.15 closing price. Other than this chequered activity, we kept VZ/L/29.51 as it continues to act well as a safe haven stock. Over at the NQ, our 15min criteria on triggering a long when the market looked poised to break out did what it is meant to do & kept us out of the trade. We opted to not look at the short side around 6pm, although closing prices and patterns were if anything somewhat more negative than we had expected. In particular, QQQQ D volume ticked up a bit, although the 50MA held up after a late session test.
Market Thoughts: 25/10/2005 10:14 / Trading move spurred by Bernanke announcement / The types of reversals which we saw Monday are quite rare, where the market rallies in a big way so soon after a major down day as seen last Thursday. Looking at the Dow, 170 point moves don’t turn up every day. But there are caveats, at least for now: volume yesterday was lighter than the three down days seen in the last four sessions; near term, 10,400 is a key area for INDU to prove itself. Due to the extreme choppiness seen in recent sessions, trend & moving averages indicators are still giving a murky ‘read’ on near term direction. As we said yesterday, the Nasdaq looks in rude health compared to INDU. How much of this is the GOOG effect is a question. History tells us that new Fed chairman announcements can lead to turbulence down the road. It’s far preferable to rally off hard data rather than a vague feeling of relief at the announcement. So we are guarded about the sustainability of this move, but open to raising market exposure as the market evolves through Q4 and into 2006. Yesterday’s pivot move in QQQQ D was impressive and comes on top of the two +BE’s seen since 13 Oct. Technically the move on the daily chart can be traced all the way back to the 13th, followed by a major +BE and breakout on 19 Oct. Due to the tight range we find ourselves in, and the impending major test around QQQQ $40 – assuming there are no roadblocks in the next few sessions – we are keeping our focus on the NQ Trading call, and will let market dictate the terms of any potential QQQQ position we may call. On the momentum calls, we are long ADBE, VZ, ANDW & DHI. It will be interesting to see if DHI can get any traction at the 32 level. Certainly it’s technically all set up and primed, but housing is a delicate area right now, so we are watching this one closely. Our purer growth call in ERTS was indeed the one to run with, but intraday we felt we didn’t want to push the edge too far. You may also ask us why no GOOG nor BIDU when we have had profitable calls on both in recent months. We are taking this market in small steps, and the idea is not to get carried away by a so far unproven, near term oversold bounce. We also want to see greater synchronicity amongst the three main indices before we resume a more pro-active approach. Our positive view on US equities on a 3-6 month basis as well as the longer term (12-24 month) view remains undiminished.
Market Thoughts: 27/10/2005 11:02 / Yesterday’s Nasdaq dump initially sparked by AMZN’s big decline shows the challenges of attempting to play this market in the short term frame. We added three new names : MSFT at 25.15 peaked at .33 on a –BE H, but held quite well at the close; ADBE at 33.19 peaked at 33.64, closed 32.88, SP (20c maximum pain)) hit 32.99; AMGN 76.29 gave up most of Tuesday’s gains and here we should have played it as tight as ADBE; our 50c max pain threshold was hit; CHK we did call right as energy reversed intra-day and we closed at 33.11 (+1.91) prior to a 32.15 closing price. Other than this chequered activity, we kept VZ/L/29.51 as it continues to act well as a safe haven stock. Over at the NQ, our 15min criteria on triggering a long when the market looked poised to break out did what it is meant to do & kept us out of the trade. We opted to not look at the short side around 6pm, although closing prices and patterns were if anything somewhat more negative than we had expected. In particular, QQQQ D volume ticked up a bit, although the 50MA held up after a late session test.
Market Thoughts: 25/10/2005 10:14 / Trading move spurred by Bernanke announcement / The types of reversals which we saw Monday are quite rare, where the market rallies in a big way so soon after a major down day as seen last Thursday. Looking at the Dow, 170 point moves don’t turn up every day. But there are caveats, at least for now: volume yesterday was lighter than the three down days seen in the last four sessions; near term, 10,400 is a key area for INDU to prove itself. Due to the extreme choppiness seen in recent sessions, trend & moving averages indicators are still giving a murky ‘read’ on near term direction. As we said yesterday, the Nasdaq looks in rude health compared to INDU. How much of this is the GOOG effect is a question. History tells us that new Fed chairman announcements can lead to turbulence down the road. It’s far preferable to rally off hard data rather than a vague feeling of relief at the announcement. So we are guarded about the sustainability of this move, but open to raising market exposure as the market evolves through Q4 and into 2006. Yesterday’s pivot move in QQQQ D was impressive and comes on top of the two +BE’s seen since 13 Oct. Technically the move on the daily chart can be traced all the way back to the 13th, followed by a major +BE and breakout on 19 Oct. Due to the tight range we find ourselves in, and the impending major test around QQQQ $40 – assuming there are no roadblocks in the next few sessions – we are keeping our focus on the NQ Trading call, and will let market dictate the terms of any potential QQQQ position we may call. On the momentum calls, we are long ADBE, VZ, ANDW & DHI. It will be interesting to see if DHI can get any traction at the 32 level. Certainly it’s technically all set up and primed, but housing is a delicate area right now, so we are watching this one closely. Our purer growth call in ERTS was indeed the one to run with, but intraday we felt we didn’t want to push the edge too far. You may also ask us why no GOOG nor BIDU when we have had profitable calls on both in recent months. We are taking this market in small steps, and the idea is not to get carried away by a so far unproven, near term oversold bounce. We also want to see greater synchronicity amongst the three main indices before we resume a more pro-active approach. Our positive view on US equities on a 3-6 month basis as well as the longer term (12-24 month) view remains undiminished.
