Is it time to bail the techs? Possibly, Chips just got ahead of themselves. You can't lower your earnings report drastically for the 3rd quarter and then miraculously declare a rebound in the 4th quarter. If you are making no money and have zero orders than of course even 1 order more than zero is REBOUND. All we hear are the familiar "softness and lack of visibility". So its obviously not isolated to JNPR. We can have CIEN, VRSN (that would be a shame, but its possible) MXIM, ADI all of them will wear the 30% discount sales hanging on them (like the end of Christmas sales.
I'm still not comfortable taking home short positions (who is except those that say they did after Monday/Tuesday) At this point I'm thinking once again of put positions but selectively, one by one. Who is to say that what you pick up on Monday, won't have a "JNPR report" on Tuesday morning? Who wants to take the chance?
There is always that transitional day where some longs get caught in a downdraft which is why I kept my position in technology very small while other sectors are larger positions. WE had the same transitional day in the oil/energy sector where we saw 5% or so of our profits erode because we didn't get out of the oil/energies at the exact time. If we waited a second day, we saw the loss grow 8 or 9% but that was a small price to pay for the ROBUST gains in that sector.
We have enjoyed the largesse of the semis, the networkers, maybe its time we said goodbye for a while. Whatever you do, don't overtrade. I'm seeing some traders in and out with every tiny wave of the trend. I think a lot of it is simply because traders don't like to or don't know how to short, so they MUST look for long opportunities and also some traders are afraid they will be 'caught' in a rally (overused word) so they cover WAY TOO SOON.
Follow the predominant trend, don't overtrade don't escape behind the word 'scalp' to excuse a lack of confidence in a trade. When the market internals are worsening, don't get petrified at a bear flag reversal.. Rallies are rare in markets like today, the reverse was true yesterday. Don't look to short when the trend is up on every blip down. HOLD YOUR TRADES longer. Don't assume a pre market upgrade or downgrade will bring the stock up or down. Wait those 10 or 15 minutes before getting into the trade.
Also one last thing, know your weaknesses and try to conquer them. Some of you like to hold positions into the close on a good day because of the euphoria they imagine will continue the next day. For others its holding through earnings thinking they will ratchet up the 'big win'.. If you are tempted, take a small position. Learn to trade simple options, they work wonders. Don't try to read MARKET for THE NEXT DAY in the last 5 to 10 minutes of the session especially by buying the 'run up' or shorting the 'drop' into the close. |
