In recent days there has been a lot of chatter about the indexes crossing thier 200 day moving averages. Technicians believe that there is much less resitance going up further then there is for a significant down move as the charts stand. As I am not soley a techincal trader, I will not make my trading decisions based only on these techincal signals. But I will remain aware of the signals when cosidering a play.
The biggest thing I am looking at right now is how big the retracement should be from the 400 point up move on the dow we saw since last Thursday. I would be comftorble with a 50% retracement before we continue higher. I suspect that we may enter a trading range soon, but this is pure speculation. If we do retrace more than the 50% I my become more nervouse for a bigger down move, as this would take us back below the 200 day moving average.
I guess we will see.
I'm very conflicted, confused and cautious right now... so many contradicting indicators and market reactions that my crystal ball is very cloudy right now. The way I'm wading into this market is with protective stops on my stocks and LEAP's with my call options. My portfolio's already up close to 50% since the beginning of the year (by betting heavily on the financials) I am torn between moving forward aggressively and playing complacent.
ReplyDeleteWell the best thing about being a short term trader is that you can change your bias of the market as soon as the signals you watch take a change for the worst. You can be very nimble.
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