5/8/2010 gameplan | Bulls on Wall Street

5/8/2010 gameplan

 
 
 
Yesterday was a nasty day..One thats not totally unexpected as the signs were there. As we have been posting all day. We have been seeing major distribution days in the market for 2 weeks.  Check again the volume pattern. Notice the how the volume is heavier on red days then green days by a significant number.  This indicates that institutions have been selling stocks and on updays only the retail traders have been buying the market.  The depth of the drop yesterday scared me and ive seen almost everything the last ten years trading the dot.com bust, housing, bust, asia currency crisis, and 2008.  We’ve had a nice 3 month rally where many of us have made money hand over fist.  A few days worth of losses no matter how unfortunate are part of the game.  There is no way to confirm  a change has happened till the evidence presents itself.  The only thing you can do is make contigency plans and prepare for both long and short trades.
 
This is why I added big shorts in WYNN, AMLN, BEAV and some others.  Even though I was unsure of what would happen. I  wanted to be protected.  I took a bath on many of my longterm positions and swings like KAZ and some others.  As scary as yesterday was….YOU have to be ready to buy into the bloodshed.  You strategy in this type of situation is to cover your shorts into the mess and then “buy the blood”  during the mess we added $uco $dear $snv all which moved hard as market stablized.
 
For the time being this has become a traders market.  The trading is going to have to be much quicker and faster.  Sell the rips, buy the dips.  I’ve been posting in boom factory sell all spikes, sell all spikes.
 
I know many people are incurring heavy losses….we cant just sit on these losses. Got to take take action and shake and bake your way out of it.  Thats why its imperative you dont just pick 1or 2 plays and sit on them.  Spread the money around.  Go a bit smaller into ur positions. Leg in or scale in and then scale out. but trade quick.  there was money to be made yesterday but you have to be ready to pounce on them. 
 
the job numbers are pretty good..  my deal till market reclaims its momo is to trade very fast and fade the spikes.  Over the past year…there have been many gap fades on the jobs numbers so if we gap up from the number I will scale out of my positions and wait it out.
 
Technically we are in no mans land. I feel its to late to short here as we are pretty far away from the breakdown of the 50dma but we are no where near the 200dma yet.   After the big reversal yesterday the market is no longer oversold so we have no significant edge there.
 
today on gap up…i plan on scaling out of some positions… The first 10 minutes of market are the best time to sell. You will see many stocks gap up nicely then fade by 10am.  That is usually when i scale out a few then i might readd those back on the fade. 
 
Even with great job numbers I dont expect this rally to hold unless we get a big EU news event or soemthing on that line. 
 
In the trade guide book. The typical trade would a light rally with a subsequent retest of the lows. 1180 on the spx will be heavy heavy resistance.  I will trade accordingly.
 
One thing we have to aware of and its impact is coordinated Central Bank action around theworld as we saw a massive pump from the Bank Of Japan last night 
 
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I am trading pretty actively UCO right now. Double etf for oil.  Look at the last year. Everytime Oil gets this oversold via stochastics there are very very violent snapbacks.  This one is hard to time so you  got to leg into it… On weakness I am buyer of more and then will sell partial 1/3 positions on all rips.
 
 
  
 
 

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