Tuesday, August 04, 2009

Today's triggers--excerpt from tonight's report

Volatile move in ICE today -- here is our trade in it: The stock gapped down along with the market but then started a fast run for resistance at 98 -- at that point we were wanting to get in but were hesitating because of the gap-down (in market and in the stock) and the lack of any base. The stock broke resistance (a) and we waited for an entry to the EMA. We bought a half position (b) near 96.5 on the pull-back and bounce on the EMA (even though EMA was not ascending, thus the half position) and watched. The stock rallied to R1 but couldn't take out 97.5 and quickly reversed down back through the EMA thus stopping us out at 96.

A good example of why you don't want to be in the stock once the EMA is broken. We can live with the 50 cent loss we took, that's just part of the game, but we would have been livid with ourselves if we had a multiple-point loss on this trade. Losses are a natural part of the business, it's only when traders go in denial over what they see in price-action and refuse to take the iniital small loss that you get a real hit/blow-out.

JOYG very nice base and break at 39.7-39.8 with an add at 40.

RGLD 42.5 worked.

WFC set up well at the daily spot of 26 even though entry could have been anywhere over 25.8 as the stock was rising over an ascending EMA:

Giddy market continues up -- stay long until the music stops.

Update: small market reversal after writing this post and another trigger FWLT (24) which unfortunately hit our spot after being mentioned by an analyst on CNBC.

Market acting more tired but refusing to pull-back in any significant manner.