It has been my opinion for quite some time that it would be very healthy if the markets were to have a nice pullback. We need a little fear in the market, a little panic, the shorts need to make a little money and the longs need to hang out on the sidelines for a little while. I am not saying I want to head into a full blown bear market but I would really like to see us have a healthy correction of 5 to 10 percent.
The problem is, I am not the only one, it seems like everyone I listen to are anticipating the same thing. That my friends is the problem! The markets rarely do what everyone wants to happen, and nearly never when you expect them to do it.
So what do we do? We trade the market that is and not the one we are expecting or anticipating.
I mentioned yesterday that we need to be nimble and we need to be quick. I saw quite a few failed breakouts yesterday. I was very quick to take profits or bail on positions if they started to go against me. I scaled out of several winning swing trades and built my cash. For the last half of the day I didn't take a single trade I just observed .
So the rare earths had a big pop last week leading me to believe maybe there was a sector rotation going on. They were one of the hardest hit sectors over the last several years. However, since the big pop they have been falling back to earth. Then yesterday, one of the other hardest hit sectors > The shippers, had an amazing pop that made my morning and my trading day. So the sectors that have been left for dead are getting some play, is this a sign that the big money is looking for somewhere, anywhere to land?? I don't really know but I do know that I am building cash and I am skeptical of the so called "garbage stocks" and there sudden revival. $SIFY $ROSG $NEWL $AVL $REE $MCP all come to mind. I am not saying that I wont trade them or that you shouldn't either. I am just suggesting that we do it very quickly and book profits while scaling out on the way up.
I do not know where we are headed or when the correction will come. What I can say, with 100% conviction, is that there will be a correction and that my friends would be very healthy.
Stocks that caught my eye and morning movers
$ZIXI continuation,$IDIX 4 dola holla 50ma day cross poss gap fill, $AMBA, $CERS 52 week highs on deck, $CIM , $RTK kinda hot ,$RVLT, $UPIP coiling under the 50day, $MOBI really hot daily very thin though, $URRE pr, $JE continuation red to green 7 dolla holla? , $RGDX continuation? thin, $ANAD 2 dolla holla testing 50 day, $FOLD possible flat top breakout, $SUPN and $FORM for continuation, $ORMP pr , $ETRM pr Thin, $JRCC pr
Seeking Alpha
Today's Markets:
In Asia, Japan +0.67% to 15138. Hong Kong: Closed. China +1.38% to 2282. India +0.19% to 20286.
In Europe, at midday, London +0.34%. Paris +0.34%. Frankfurt +0.13%.
Futures at 7:00: Dow +0.31%. S&P +0.33%. Nasdaq +0.2%. Crude +0.48% to $95.64. Gold -0.68% to $1377.00.
Today's economic calendar:
9:55 Reuters/UofM Consumer Sentiment
10:00 Leading Indicators
1:45 PM Fed's Kocherlakota: ‘The Future of Financial Regulation and Monetary Policy’
Notable earnings before today's open: DCI
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