UPDATE ON TODAY'S TRADING - Wednesday May 15, 2001:
We came into the trading day with short positions in HOTT, NVDA, BRCD, and AMAT. At the open, as expected, the market gapped down and we covered half of our short positions (except for HOTT, which we took as a swing play short) for a nice profit. As is typical, the markets then rallied from the gap down back into the gap. We used the end of this rally to get short JNPR and BEAS. The Nasdaq Futures then had an abrupt, fairly heavy volume sell off followed by another rally to a double top.
We were still short all positions when the market's true sentiment reared it's ugly LONG head (ugly of course only if you were short :-) ). A short time later the double top was broken on the Nasdaq Futures and we were forced to cover all of our remaining short positions (including HOTT)for a modest loss. These losses basically put us down slightly on the day.
It was time to get long. Rather than just jumping in long at the top, we patiently waited during the doldrums to find quality long setups with reasonable risk/reward ratios. We chose to enter SEBL, JNPR, BRCD, BEAS and NTIQ with the intention of holding them overnight provided they and the market closed strong. By the end of the session, we had turned our slight loss into a modest gain.
Overnight we are carrying JNPR, BRCD, BEAS and NTIQ long.
If the current strength of the over night futures holds up until the morning session, we should see a nice gap up tomorrow. We intend on selling into any gap up.
Everything considered, we had a decent trading day. Our only regret was that we didn't cover our short positions a little quicker and take more profits off the table in the morning gap down. With the Fed strongly behind the markets, both moves would have been wise.
Neeles to say, we are still in a trading range until the markets prove otherwise. Therefore, we continue to stay NIMBLE by regularly taking some profits off the table and strictly honoring our stops.
Trade Well, -Ed |
