After Market Close October 30, 2007 |
BOOOO!
Well, the market got scared late yesterday, no doubt as an homage to All Hallows Eve today. That or they were worried ahead of the Fed's announcement. That is always a concern, too. We know that the Fed will cut. The futures have been telling us that for some time. We don't know that the Uncle Ben won't throw us a curve on the amount or in the wording of any statement. If he cuts more than expected, the market will rally a lot, but if he says the wrong thing, it might fail. If he doesn't cut, the market will fall. I'd say that a trader could probably fade any substantial move in either direction today. Maybe in both directions.
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DJIA: The Dow was a bit weak. |
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SPX: The S&P died late but it's up in Globex. |
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NDX: The Nasdaq held quite well, though it's looking a bit "rising-wedgey". |
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RUT: The Russell was down, and looking a bit sick, but support held. |
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HUI: The miners were weak, but I'll bet they jump again on a cut. |
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SCON: Supercon was up huge, but gave most of it back. |
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AZPN: Aspen pulled back but the consolidation looks bullish. |
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DRI: Darden rallied, but not a lot. I'd say we're probably OK here. |
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SMCI: Super Micro was down, but it's probably just testing the break out. |
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SOLF: Note to self: Take partial profits on big up moves. Solarfun is gone. |
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CECE: Ceco was weaker than it should have been. It needs to bounce smartly here. |
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ARAY: Accuray had a great day. We're going to hold for the target. |
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AMGN: Amgen has a nice, longer-term positive chart. |
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DLM: Del Monte looks bad, but don't short it. It could still go into play as a take over at any time. |
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HAS: Hasbro has a decent look to it, but I smell failure ahead. |
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WIND: Wind River looks like a classic Buy. |
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COGO: Comtech also looks higher. |
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NAK: Northern Dynasty could pop here on a break up. |
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Summary:
Today is likely to be a wild ride. The options tell us that we should expect ANYTHING, especially volatility. The market is tired, but there are quite a few Bears, still. I'd say that we'll rally and then trade down on Friday or maybe Thursday. That is, however, just a guess. Try to remain constructive, since our ideas are popping and that's a healthy sign for the market.
Be Well, and Trade Smarter Than the Average Bear!
-The ChartSmarts Team
Current Positions:
Long 12.5% SCON at 8.69, stop at 10.83
Long 50% OCR at 34.14, stop at 32.22
Long 50% AZPN at 16.52, stop at 15.72
Short 50% DRI at 42.64, stop at 43.77
Long 50% SMCI at 10.03, stop at 9.66
Long 25% CECE at 15.07, stop at 13.92
Long 50% ARAY at 18.12, stop at 18.12, sell at 21.54
Watch List:
AMGN: Buy 50% on a print of 58.96, stop at 56.57
HAS: Short 50% on a print of 28.27, stop at 29.64
WIND: Buy 50% ona print of 12.02, stop at 11.49
COGO: Buy 50% on a print of 21.63, stop at 20.51
NAK: Buy 50% on a print of 12.36, stop at 11.79
Changes in Current Positions:
Move the stop up on SCON 10.83
We are stopped out of SOLF at 13.76 breakeven
Move the stop up on ARAY to 18.12 at breakeven
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*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, this includes the lifting of stops during this 30 minute period as well. 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 boundary, 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.
Rule on stops:
As a general rule for the model portfolio, we will lift all stops on existing positions for the first 30 minutes of trading. As a practical matter, subscribers may wish to leave their stops in place if they expect to be incommunicado or unavailable during that time to monitor positions.
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