Sunday, August 2, 2009
Last post I capped off with: "Here as in most other situations, some cash, sensitivity, awareness, Stop Orders and Order Limits are your most important tools. Objectivity in the way you use them will serve you well."
Now lets look a the potential for the markets to roll over and fool everyone.
A quick glance at COMPQ will show MACD [ bottom panel ] getting tired or carrying the momentum up, the Stochastic's in oversold territory, looking as if they want to exit downward, and the price candles have moved off the top track of the Bollinger Bands. Yes this is super - technical, and no I dont have a word to say about Earnings, Cramer, Big Ben or the OB. Simply, Mr. Nasty's cousin, COMPQ is looking tired.
So now what to do? Remember this is about PRE-VIEW, not Re-View, so lets find a good course of action here, now.
If the rally continues after a reasonable breather, all well and good.
If the rally aborts and turns into a rout, we must avoid $$ Damage.
If the market as a whole, marks time, we still want to be in our positions.
SOOOOO - as a plan, we refresh and adjust our STOPS, to either a cautious position that takes us "out of play" in short order, or we adapt a bit bolder stance and stick with our original stops, adjusted as part of our game plan.
Even if we get stopped out, as readers of PEAK PERFORMANCE PICKS know, there are excellent vehicles along every week, and so there will be no lack of mounts for us to ride.
If we get stopped out, we are in CASH, and can use that as a hammer, leverage to get what we want done.
Subscribers will get their Refreshed and Adjusted stops before Monday's market, and will be able to take advantage of them.
Non-subscribers can take a look at some issues I have followed in the past, with their current basic stops and take their cue as to what they might wish to do from them. The follow here, the symbol then the stop in US Dollars :
AAUK 14.15 ;
AZK 3.46 ;
DHT 4.50 ;
DNN 1.48 ;
GAB 4.50 ;
HRZ 4.00 ;
IAG 9.95 .
So we adjust our stops, and see what happens. I really dont have the willingness to presume I know what the market is GOING TO DO. I do have faith in my ability to interpret what it is DOING NOW, and make my decisions based on potential outcomes.
Any reader wishing to be a bit more cautious with their stops can simply move their adjusted stop up half the distance from the example above.