Stocks Pull Back, But Was It THAT Bad?
Posted on April 23, 2008
Filed Under Market Speculator |
Crude oil was the talk of Wall Street as it inched ever so closely to $120.00 a barrel. Volume soared above Monday’s level but stayed well below the 50dma as well as last weeks up days. There are many no dobuting this rally due to Tuesday’s market action. VIX jumped to over 21, NYSE Short Ratio continues to hit 5 year highs each day, and with Sentiment numbers from investors due out today and tomorrow I can assure you those will be bearish as well. Tuesday’s action was a nice day of pairing back gains from the prior week. Volume was relatively tame and weaker than previous up days. We’ll most certainly have bumps in the road along the way, but given the context of the entire confirmed market rally, Tuesday’s action wasn’t that bad.
If you are finding yourself not gaining any traction in this market I suggest you move with smaller positions. For example if your initial size in a position starts at $10,000 then you might want to begin with a $5,000 position. This goes if you are day trading, something I am not good at nor advocate but the theory applies. Always go smaller when you are not trading at peak performance. Daniel Bouton from Societe Generale found out the hard way buy losing $7,000,000,000.00, yes 7 billion dollars. Writing it out has more of a dramatic effect! Go small when you are not at your peak, conversely if you are on top of it. It is ok to increase your size.
Still all systems go for bulls, I am not tapping into unused equity resources nor fully margined (not using margin currently) but I think we are getting close to a point where I may use these tools. Still plenty of time for this market to build for more upside!
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