Using proper entries and exits is what has kept us safe and profitable this year. Our tier system allows us to be heavy at times, then very light when we lose our trading edge. Fed day was a day to lighten up, and only tier one long in select stocks. This is the third day of this controlled pull back, with lots of tricky divergences right now keeping us on our toes.
Since the start of this new move on September 1st the market has passed many tests. We’ve seen very constructive, tradable action to the long side. The indices first reclaimed their 50 day moving average, then the 200 day average, then next cleared resistance with healthy break outs in leading stocks. A big test looms in the next few sessions (could be today). Will the 200 day hold at 1113-1115 and keep this current uptrend intact? I will watch this closely to see if this pull in is buy-able.
Banks have been a drag on this move as they failed to make higher highs when market broke above resistance. Keep an eye on these to see if they get worse. There are lots of stock specific cash flow trades where we can get calculated entries without taking much risk.
NFLX and LVS had nice break outs yesterday, even as market pulled in a bit.
AMZN AAPL and BIDU continue to hold well and tack on some gains.
CRM and VMW are a little testy right now.
Gold is almost to $1300. It’s been a almost 3 years now since I went public on CNBC in 2008 and said it would be $1300-$1500 an ounce when it was $860. It’s nice to get all the e-mails about how I helped keep them in the trade and on the right side of the market.
