Wednesday, December 08, 2010

Market Talk

A lot of investors/swing traders talk about how utterly wrong it is to try to pick tops and bottoms.   Well, we do it all the time.  And well -- we've picked short-term tops and bottoms correctly many times in real-time in the last year we've been on Twitter, and archived for our subscribers in the last 4 1/2 years of the HCPG newsletter.    It really isn't that hard if you know what to look for.    Yesterday we sold all our swings (12 positions including many commodities that have gotten hammered since) near the highs of the day (again, all real-time) after 3 weeks of being long. 

Operative word though is short-term.  We're not into picking long-term bottoms/tops, which we think is significantly more difficult.  Everything we do is based around the short-term, meaning 2-5 day time-frame (or 2-5% in price).     

We've taken it easy today, as is our custom on the first day after sentiment change.   We like to get active on day 2-3 when decent support candidates pop up but on day 1 there's usually not much to do, for our style of trading anyway.

The only support trade that triggered today from last night's newsletter was OXY on 91 support -- we tried it since risk was so low.   Entry was around 91.03 with stop at 90.87 (it's our typical support trade strategy of getting in on reversal on alert with stop under -- many posts in blog on this subject).     First partial is always against the 20EMA/5 min chart.  Stop for rest is on the higher low trend-line or break-even.    First partial profit was for 37 cent profit (not much but risk was only 16 cents).  Holding rest to see if we can get through the 20EMA as trade now is risk-free with stop at our entry price.