After Market Close November 4, 2004
| | Big Day
Today was a big day, but we're starting to get overdone. It's possible that this rally was only news-related, and thus fleeting, but I don't think so. Certainly, I expect a correction of some sort (the number of laggards we are seeing speaks to that), but the breadth of the market projects higher until years end. Breadth has been very strong and things like the Banks and the Transports support a positive environment for investing.
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DJIA: The Dow is leading this market, which is as I've been saying. | 
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DJT: The Transports suggest this economy is coming on. | 
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SPX: The S&P might run into a bit of resistance in here (it "ought to"), but I'm open to higher targets. | 
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SPX: That weekly chart has looked good to me for some time now. | 
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NDX: The Nasdaq is lagging a bit, but that is as expected. It's still bullish, for now. | 
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QQQ: If you are prone to shorting the Q's, do yourself a favor and wait until the 50 hour is broken and use a close stop. | 
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RUT: The Russell is showing that this rally is deep and likely has legs. See the Banks, too. | 
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HUI: I'm longer-term Bullish on Gold, though short term, I'm open to more correction. | 
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BKX: The Banks are very strong and that's very good for the market's prospects. | 
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SCH: Schwab still looks great. | 
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RNWK: Real Networks continues to look good for us. We'll want to take profits soon. | 
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CMOS: Credence looks a bit iffy, but cross your fingers. | 
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Q: Qwest looks great, too. | 
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NGEN: Pass on the Nanogen. | 
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GNTA: Genta looks good on strength. | 
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ASYT: Wow! This is why Doug's the best. You have to know when to step aside, and this is how you do it. Great job, Doug. | 
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RTK: Rentech looks exciting, but for now, it's a Yo-yo. | 
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Summary:
Keep using good trading discipline, as they can take individual stocks to the woodshed for the slightest reason, and a market correction is reasonably likely. Stops are imperative. If we see one of our issues that isn't acting right, we'll cut it loose without hesitation or step away from any potential trade. We don't want to be too cautious, however, since this market could go into one of those silly-Bullish periods, where the pullbacks are minimal and nearly everything plays.
Be Well, and Trade Smarter Than the Average Bear!
-The ChartSmarts Team
Mark, Doug & Holly
Current Positions:
Long SCH at 8.93, hold stop at 8.93
Long RNWK at 5.01, hold stop at 5.01, take full profits at 6.4
Long CMOS at 7.88, move stop to 7.33
Long Q at 3.42, move stop to 3.42
Watch List:
GNTA: Buy above 2.56, stop at 2.29 | |
*30 Minute Trading Rule:
In order to prevent whipsaws, we use a 30 minute trading rule. This means that, as a general rule, we are going to "sit on our hands" during the first 30 minutes of trading. Additionally, if after the first 30 minutes of trading the range of the stock pick is within the stop and buy/short boundaries presented, the trade recommendation is valid. If the stock's range is outside of the buy/short and stop boundry, the trade recommendation is VOID. E.g. if the recommendation is "Buy a print of 10.25, with a stop of 9.95," and the stop trades up to 10.50 during the first 30 minutes, we would pass on the trade. Similarly, if that stock were to trade down to 9.90 before 10:00, the trade would also be void.
There is no 30mn rule on limit orders, but if price gaps out of the buy/stop range the trade is void.
| Past Performance is not a guarantee of future returns.
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Though we do keep a hypothetical valued account track record, none of the performance referred to should be construed to be that of an actual account. Performance is not based upon back testing, and it does not represent an actual trading account unless explicitly stated. From time to time, we'll be trading the same ideas that we're discussing here. We make every effort to insure that we and our associates not "front-run" subscribers, or to otherwise affect the price of securities that we hold or discuss. Be aware that sometimes we, or our clients, family, or associates, will hold the same securities that we discuss in ChartSmarts. Occasionally, our trading actions may not be the same as those discussed in ChartSmarts, for a variety of reasons. We will never attempt to manipulate the price of any stock for any reason. | |
