Tuesday, October 19, 2004

Lots of churning going on lately...

If I was a day-trader, I would have been tickled pink at all the profits I would have made with my perfectly executed plan for CAAS this morning. But I am in for the big swings so I never take profits on the first day of a trade, and am vulnerable to my biggest losses on the first day because of the way I trail stops.

After about an hour or so in, CAAS reversed, stopped me out and then churned for the rest of the day. I'll be watching this one from the sidelines until a sound base has time to form. Looking back, I am happy about how well everything went according to plan at the open today. It is much easier to trade elaborate plans like that than it is to wing it =)

I took a buy signal on TASR today when it remained above the resistance at $40. There was definetely a lot of churning going on though because the stock barely closed above resistance, and not even close to the top of its intra-day range. It will be interesting to see if it falls back into its base or not this week. Doing so would stop me out, but that is ok because it would be very bearish action and I wouldn't want to stick around to see where it goes after that.

I'm wary about the market right now because the magnitude of the volatility of the stocks I've been watching is getting ridiculous, and the predictability has gone down a lot just in the past few days. Reversals have been increasing in frequency in both directions. Watch the stocks on the "Where the big money is flowing" list on the front page of www.investors.com over a couple of days and you will see what I'm talking about. Just imagine the entire market pulling a PCU, UCI or MRK =/ If the dollar collapses, oil just keeps going higher, and a strategic attack this election season and we could see it happen. Be careful guys and gals! In the meantime, I'm doing what I do when I get cold: trading less and studying more.


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