Another boring day of trading on low volume for the stock market today. The indexes barely made moves of .4% in either direction and there wasn't a whole lot of intraday action to gain any meaningfull insight into today's move. Oil prices were the reason the stock market did not rally more, according to CNBC. It has to be something.
Volume was lower across the board, with decliners beating advancers by a 10-7 margin on the NYSE and 3-2 on the Nasdaq. The lower volume for the second day in a row is a positive sign for the bulls. Lower volume after higher volume on the upside indicates big institutional investors have not been dumping stocks. Instead they are simply just stepping aside.
Overall, things still look fine. There is not a lot of extreme bullishness or bearishness just a lot of bored confused traders. This is the sort of sentiment that could help keep this rally alive. If nothing else it helps build bases for the next rally. The selling does not appear to be aggressive (nothing says that can't change) and it simply appears the buyers are just waiting to make their move.
I have taken some profits, cut some losses, locked in some gains, and have kept new buys very small the past two days. I don't think this is a sign of an impending pullback it is just a sign that the markets are going through a pullback and some old leaders are making a rotation into some possible new advancers.
So, to me, the markets still look fine. There are no red flags that I am seeing that would make me think that this is "the top." Therefore, I am sticking with my bullish bias, until there is a bigger gap in the bull/bear numbers from the AAII survey. That along with distribution days would be enough to have me looking for a short term top. For now, the coast is clear.
Great luck out there!
New Swing Longs: PLXT OTE TRT -- For more info about longs go to Investors Paradise, go to Josh Hayes, and click on 'longs.'
New Swing Shorts: NONE
Longs Outperforming Market: VIMC-121 ERS-274 MFLX-200 ASF-202 PETS-132 WIRE-138 NXG-93 VGZ-94 LPSN STRL-31 VTS-25 WF LTM SCHK-41 FTK AP CTXS-46 NTES IHS-36 BGC-75 CLZR-62 DECK UIC-54 WNR NMR-47 GEMS-27 NGPS MDCC-53 RSTI-40 MTU PNRG-61 HEIA-34 STMP-47 SCVL MERX-48 CVO-89 KNXA-59 GCA CPST-28 PEIX-76 PAY-56 TGB-83 SYKE IED-93 SVNT LNUX-32 AKN RNWK QUIK ZEUS-62 NANX LIOX ANO CRUS GBN-52 DRH ECOL SWIR STEL LMIA-82 RNT ILSE FC-38 CHRK ICTG-86 PRKR SF
Shorts Outperforming Market: NONE
Stocks On Radar Screen: NONE
Taking Partial Profits, Partial Losses, Or Final Sells: NENG CHRD FLML VTSS BWNG NVAX
4 comments:
Hey, Josh, I bought LNUX at 4.20 and was wondering about a stop loss. Is the breakout point of 4.20ish or a bit lower good for a stop loss, or should it be higher or lower? I am relatively new at this and trying to learn how to handle these low-priced stocks that can move either direction quickly. I was tempted to take some profits today but fought that urge cause I think the chart still looks pretty good. Thanks for your thoughts.
i still own some VCLK at low prices and wondering if you think it worth holding still ...thanks
hey josh, i've reading your blog for a couple months when i stumbled onto it. i think your is 1 of the better commentaries out there. i am always learning and truly believe that in the expression 'that you are never as dumb in the future as you are right now'(especially in regards to the stock mkt), that's assuming you learn from your mistakes. i am 30y/o now but was on the sellside for 7years and had to get out of that industry becasue its worthless. so for anyone who reads this board, i highly recommend you DONT listen to sellside ratings or CNBC. If only i knew now what i know before the dotcom bubble, i would never have to work again. this mkt is very tough and there must be lots of hedge funds underperforming. I think the most valuable thing i am always trying to work on are my sell rules when i have a profit(i like reading when you are selling out of a position, becasue i can reference a chart to learn). anyways, keep up the good work....signed, OR_Kiter
Being a new investor you should not be trading low priced stocks. I am not sure why everyone is attracted to that. If you have a 88% favorable risk/reward on a $30 stock going to $40 you take it. However, most newbiews do not. They take the higher risk/reward ratio of 33% on a stock going from $4 to $6.
My cut loss on LNUX is the 50 dma. That would obviously leave you with a loss so I would use 4.20 as your stop loss.
In the future, I would stick to stocks over $12 until you know how to trade on your own.
If you have not taken any profits in this speculative stock you are also trading wrong. At 25% gain on LNUX you should have sold at least 20%. The rest you can let ride. If you haven't locked in any profits I would lock in at least some. If you are using a web broker and not a realtime soft. product I dont know what to tell you.
I hope this helps. Keep up the hard work and get off those cheap stocks. I would rather have 5 shares of a $50 stock that has real earnings than 250 shares of a $1 stock that is complete speculation.
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I would keep holding VCLK
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Thank you, OR_Kiter. I am flattered that you think mine is one of the better commentaries out there.
Keep up the great work, Kiter.
It is really nice to have someone of your background reading my blog.
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