The Bear Session Game Plan.. for intraday traders/swing traders.
In this market you have to be prepared. My broker doesn't do stops on options so you MUST exercise mental stops. Since I'm a bit precipitious with my trigger finger anyhow I managed to get out but relatively unscathed.
a)I have been accumulating puts on the index options while the dow was wildly high on Tuesday/Wednesday. I was preparing October puts since the beginning of the month. It was a hedge against just this sort of thing. Sold both puts and calls and finished ahead.
b) Of course another way is just to get the single stocks that show good momentum and stick with them until they lose strength, which unfortunately looks like only intraday. Some of you were in INTC, GPS, SEBL,FEET, MRVC or whatever. Stick with them till the upward momentum fizzles. Through all this some of the best stocks like COST, BBY, SAVLY,GPS were still strong. But the reason for that is in the next criteria.
c)Study the earnings reports very carefully, or same store sales in cases of the retail sector. just look through Zacks, and whatever you find on earnings preferrably those going forward as well as historical results.
d)If you are a full time trader read some of the news datafeed in the morning, preferrably before the open. Chances are you will find one good news item on a particular stock so that you can ride the stock through the session, whether the rest of the market is up or down (i.e.AXNT got an upgrade). A upgrade, good earnings report, good sales report for a retail stock on an otherwise sluggish day could move your stock (i.e. TECD today). What's better is that on days like today they don't usually gap up so you an get in almost on yesterday's closing price.
e)Don't buy necessarily but wait if you would rather be on the sidelines. Write down the ones that had good reports, good earnings projected forward for the next few quarters is even better. When the market improves, these will be the first to rise. You only have to see stocks like QLGC, OTEXF, LBOR,ERTS, TWMC to see gains of between 20-50% in one or two sessions.
f) If you are more experienced be a contrarian buy when the market trades down and sell into strength. I picked up CMVT and CDG when it was up 1 7/16 but when the stock was so undervalued and oversold. Don't be afraid to get back into a good trade if you made an error, as long as you are not chasing it and it's out of your entry range. |
