1:30pm
Good Afternoon Readers. Today we see how what happened yesterday can sometimes have no bearing on the next day. Many were looking for a correction to start to add long positions but we didn’t see that opportunity today. So again, I find it hard to trust this market to the upside beyond this near 100 point gain right now.
The SEC has stated today it will institute an “alternative up-tick” rule to try and combat aggressive shorts. While I like the idea that they are trying to combat aggressive shorting in this market, I don’t see how this rule will truly get the job done. You can read more about the new rule here. One idea that I see to combat this rule is the aggressive buying of ETF UltraShorts. When the 10% barrier is met, shorts can continue by buying those ETF’s. The rule does indeed make it harder to short after 10% but, it is far from impossible to those which do this for a living. Also to note, I don’t see this rule as having any indication it will govern the pink sheets. Unfortunately, we won’t see any advantage down there in the micro caps. I think the SEC and Finra could have done a better job with these regulations but it is better than nothing.
Bernanke spoke today and assured us that rates will stay low for a while which is good news for the bulls. We really don’t have much information to tell which way the market will go though. Since we don’t really have an upper hand which we can take advantage of in this market, it is hard to be aggressively long or short right now. I’m trying not to force anything today in larger cap stocks and sticking with my game plan of staying in small caps which tend to trade under the radar of the general market.
In portfolio news, GoIP Global (GOIG) is holding steady today at newly established support levels. Shareholders are anticipating a PR this week saying we are ready to launch the service and hopefully an official date as well. The stock could jump on that news but be sure to trim some profits off just in case it dips again. We could see dips if the launch date is at least a couple weeks away from the announcement of it so for those who are active during the day, you could find ways to increase your profits.
I also added to Sirius XM (SIRI) yesterday around $1.06 as I feel shares were oversold prior to earnings. I expected the PPS to ride up and become overbought into earnings but instead, we are seeing some opportunities to add prior to earnings tomorrow. If it dips closer to $1 again, I’d accumulate more shares and will look to shave some off after earnings and right-size my position.
Outside of that, I’m running some small trades with tight stops and twiddling my thumbs waiting for some clear direction in this market. Let’s get ready for the final hour and hope it is more exciting. Thanks for reading Kudrna’s Stock Market Blog. Good luck out there.
Mike
At the time of publication, Kudrna was Long SIRI and GOIG but positions can change at any time
