Thursday, January 12, 2012

Something Is Up With This Market Of Ours

So the markets had another up day with a buy the dip scenario and a slow grind tape move higher. I for one luckily am not fighting the tape and that has saved me from taking draw downs on my account in this stock pickers market. Its becoming more of a market where at the end of the day your PnL is going to depend on whether you were in the right stocks. I for one am a good stock picker and if you come to ( TheTradersRoom.Com/ password: Remote) you can find out for yourself. On the other hand, you have those people that have been trying to play the individual market that are getting chopped because the slow tape is causing them to trade and not let trades pan out and you have those that are trying to short the market. I do think this market wants to go higher, but there is a reason why volume is light and stocks are having trouble breaking out with momentum. REAL MOMENTUM. The chart that I have posted below can give you a good picture of the risk to reward of buying at these levels. Some stocks are holding up and some are not. The index's are trading like garbage and stocks that are garbage are coming off the bottom. The more I think about it, it seems like they are trying to drive in the participants in the junk names just to provide some cash flow trades, but then when its time to go down those will go down fast. We will see !!

Couple things that I noticed from the market today was that the dollar was selling off early a.m. and the market did not trade higher at the open when the dollar was weak. We did however trade lower once the dollar futures reversed back lower at around 10:45, hence the markets and mostly all stocks reversing around that time. Crude oil also had some heavy selling out of nowhere come in around 1 pm and I'm not sure if it was news related. Silver and gold are in there own world and I try to play those sectors around key inflection points. They are in a no trade zone for me and that's why I haven't messed with them lately. I did catch the bottom on the $ZSL trade on the day it ripped over a point. In any case, look at the chart below and ask yourself will you be heavily invested in the market right now or would you add to your portfolio with the current spot we are trading at ? I wouldn't , but that doesn't mean I won't trade stocks that are moving right now..

SPY

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