premarket 7/29/2011

Morning folks. futures gapping down 1% again.  its a very we are starting to get to levels where a major bounce can brew but we are not quite there yet.  SLV is up 1% so far GLD up .5% and spy down 1%.  We are starting to see come great washouts in stocks with many stocks after earnings getting faded hard.    Today i expect a lot of choppiness and whipsaws as the market will most mainly on rumors and news leaks.  If you are a trader that has to work today and can not monitor tick by tick then just take the day off for daytrading as you can buy a stock it will spike 5% then be down 10% an hour later.  This is a hit and run market for the moment and if you cant be there to really be engaged just sit back and relax.  One of things you will find about trading is that you make a good chunk of your profits in just a few days every month anyways.  Its much better to have some ammo saved so that when  a low risk high reward opportunity presents itself you can pounce. The last thing you want to be doing is have 5-6% positions taht are all down 10% and then we get this epic market bounce and you have no cash to play it.  Shorting at this level is also tricky as any good shortsetup could get squeezed 10% to the upside on any rumor of debt deal. Its happened to me countless times where i short on the backend of a market dip and then i go to a meeting or to take a leak and bam im squeezed to the upside forcing me to cover only to see me cover at the top.

For those of you with slightly longer timeframes in the next day or 2 it could be a great time to nibble on some longer term swings.  If you swing day to day you probably will get whipsawed but if you can look out a week ahead there might be some great low risk opportunities.

Often on these days the best thing to do is watch the action and make watchlists.  make watchlists for stocks that you would love to own and prices you would like to own them at.  Make lists of stocks that are near breakout that cuodl rocket if market turns and also make a list of the most oversold type of stocks that coudl have epic snapbacks.