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Strategies & Market Trends : DAYTRADING/SWINGTRADING STOCKS with INTRADAY INVESTMENTS -- Ignore unavailable to you. Want to Upgrade?

To: - who wrote (7)	5/15/2001 7:40:41 PM
From: -	Respond to of 565

UPDATE on TODAY's TRADING - Tuesday May 15, 2001: In the premarket today (Tuesday AM) trading in stocks was light and fairly flat, with the S&P's up a couple of points but really not providing much of a clue to the tone of the pending session. We scanned the premarket for some of the most actives, and somehow managed to miss the news (major analyst downgrade) on VRTY which was gapping down after a multi-day down move. Going long the gap down to catch a bounce-back move, we were quickly stopped out to start the day with a 1 point loss [we have instituted new, improved news-scanning procedures to preclude this mistake in the future]. We had a bit of a rough start today, going on to two more losers in a QCOM gap-up short (-1pt) (QCOM was also picked up in our pre-open scans) and a failed JNPR short (-0.6pt). However things began to turn around as we next bagged a half-point shorting CIEN. VRTY went on to provide us with a shining example of why it's critical to exersize rigid stop-loss control -- falling like a rock from it's gap-down open and was basically getting hammered big-time. In order to have something fairly small/conservative in play to take advantage of the the Fed announcement at 2:15 EDT, mid-morning we moved into a small position in DJVQC DJX May 107 puts. These are out-of-the-money Puts on the DJX (1:10 Dow Jones Industrial Index proxy), giving us a very cheap short position in the Dow through expiration on Friday, with minimal cost (50-60 cents per contract). This risk reward potential on this trade is 5-10:1; the maximum loss is simply the (minimal) costs of the puts. After the Fed announcement, in typical fashion the market spiked sharply higher, then reversed to trade back to pre-announcement levels. Following this a strong, sustained rally for close to an hour pulled many longs into the market. We jumped into JNPR long on an intraday breakout at 54.40, took partial profits at 55.70 and then sold the rest of the position near the highs of the day (56.28) before JNPR reversed and gave it's entire post-Fed rally move back, as many other stocks (the entire market). Near the close, we shorted NVDA which setup nicely in an hammer reversal pattern off a failed pullback recovery. Scanning after the close, we shorted AMAT immediately upon the news hitting the tape that there will be a dramatic earnings shortfall this quarter (the semi sector/$SOX had trouble all day, with INTC getting pasted); we'll be looking to cover half of that either in the premarket or early in the session, and trail a stop down on the rest of the position, as is frequently our trade management style. We are also short BRCD overnight, which held up relatively well despite a lackluster earnings conference call. Throughout the session, we provided audio commentary and interacted with customers via our text-based online trading education center. We also posted annotated charts of $COMPX showing the inside day/range contraction setup, and of the S&P Futures as they formed a Head-and-Shoulders setup from which we project the low of the day before the market broke, allowing our customers to exit many long positions right before the market broke and sold off to the day's lows (Deron got a "trading like a Genius medal" for that one ;) This was a relatively difficult session to trade - ranging from boring low-volatility chop, to wild ripsaw moves up and down across the range. However after starting the day by taking 3 losses sequentially (tough on morale), we made the losses back and went on to position ourselves well for overnight moves. So, tomorrow's pre-market will render the verdict on how well we really did on the day, since we went out with open short positions. We feel it was quite an accomplishment just to NOT LOSE MONEY, actively trading a session like today's... tight stops were adhered to and we stayed NIMBLE - that's our keyword for the month! Good trading, -Steve