September 2, 2009
Note: I will not have access to a computer Thursday and Friday while on vacation, so there will be no Reports or intra-day notes for those two days. The next report will be for the first trading day next week.
Today's welcome continuation down move (for those of us net short) broke through last week's support zone and sets up a possible move to the next support zone at $98.
If looking to add short positions, look for a weak bounce to former support. If looking to get long, wait until the $98 support zone is reached. This would setup a nice oversold bounce trade, with stochastics reaching oversold conditions.
I am still holding all of my short positions but LMT, though using profit taking strategies to lock in profits and still benefit from a possible down trend.
I took partial profits in AAPL and VPRT. I am still holding SNDA and POT, which are now partial positions after profit taking.
I exited LMT. It has not been cooperating. The fact that it has not participated in the market down move, even with a nice short setup is what got me to give up on the trade.
I was stopped out of my SSO and SPY long partial positions at my entry levels. Profits had been taken earlier at the top of the trading range (see past reports). I am happy with this SPY trade as it allowed me to make some profits while waiting for my short positions to work.
Keep and eye on index and focus list stocks. Shorts can be added on a weak bounce. Longs can be added on weakness, when SPY reaches support.
If the market continues to drop, keep the "oversold bounce" and "rubber band" setup handy. Look for stochastics that reach below 10, price moving far from resistance and big drops to support.
Keep an eye on key support and resistance levels, along with stochastics. This should make for some easy, slam dunk trades.
While I don't have my full setup, I will have my iphone and will monitor the index ETFs and core focus list stocks. This is a good strategy when away from your usual trading setup or on vacation. SSO and SDS will be the main trading vehicles, with focus list stocks as possibilities.