Thursday, January 07, 2010

Prey On the Weak, Not the Strong

Sector rotation, distribution... whatever you want to call it, it's prudent to pick your poison carefully right here or risk getting burned. While there are some moves down in certain sectors obviously, the financials aren't playing that game just yet. Time is on our side if we just take advantage of it. What do I mean? I mean I want to short X like nobody's business, but I'll wait and wait until true weakness rears its head, and not a minute before. Too easy to be a hot dog and try to front run a move, but unless you're interested in continually losing your trading capital to stop losses, wait, wait, wait! I'm seeing potential inside days on XLB, and many of the other sectors, but that doesn't predict what happens tomorrow. Okay... off of my lecture for now. I just want all of us to make the best trades possible.  No need to mention the economic calendar today- we all know what’s coming tomorrow and it should make things interesting, for lack of a better word.  In fact, it could make the session close interesting too, so keep your peepers open, and good trading to all of us.  One other thing I wanted to say about the “January effect” setting the pace for the rest of the trading year.  There’s an old trading saying that so goes January, so goes the rest of the year.  Really?  January ‘09 closed down on the month, so toss that notion aside and trade what’s right in front of us as this year progresses. 


Currently Weak

Currently Not Weak

Great example of a stock running up and consolidating before a higher move


Relax a little today…. let the trades come to you!  We’ve got time…..

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