Market Update 8-1-12

The market is basically moving sideways and is not the best market to trade in.  Reason being, the market moves are not big enough to make enough money to pay for your commission and make a decent profit.  Plus you have to have perfect timing in order to catch any movement in a stock in order to make some money.  There are ways to make money when the market moves sideways but these are more sophisticated trades.  For beginning traders I would definitely wait until there is a confirmation of the market’s direction before getting into any positions.  If you see a stock that is moving on its own regardless of market conditions you may want to take a position in it, but given the way the market responds to news and rumors it is safer to just wait until there is more definition in the market’s movement.

The best move to make at times like these is to buy dividend stocks that pay you a dividend regardless of the market moves.  I just got my dividend payment from ARR and it feels good to be able to make money regardless of where the market is.  It feels even better when I look at the value of ARR and it is up 82 cents since I bought it (read my previous blog entry on ARR).

Trading Ideas 7-28-12

We had a market rally on Friday but I would still be careful not to go long on any positions for more than a day or two.  Although the bulls have most of the strength overall any unsettling news could derail this rally fast (as we have seen before).  I missed getting into a position on GE and WMT but I didn’t feel comfortable getting in when WMT is reaching all time highs.  You don’t know when it will turn around on you.  As I pointed out before analysts are looking at WMT getting to $79 so we’ll see if that holds up.  I will definitely get in on a pull back next time now that we have tested these new highs.

This is what I had mentioned before about GE.  If you look at how it has been tested over these past couple weeks and it still charges back up despite market news, you can feel comfortable about getting into a position.  I saw a profile description yesterday on one of the day traders I’m following on Twitter. His philosophy was spot on…

”My trading approach is technical focusing on stocks that are trending and have a catalyst behind their movement.”  

It is very important to keep this in mind when choosing a stock to trade. The technical setup will tell you when to get into the trade but if there is no trend then the stock can go either way…”the trend is your friend.”  If there is no catalyst or reason for the stock to move higher like analyst expectations, growth in the sector, or a new product release, then the movement in the stock won’t be strong enough to make a profit.  Lastly, I would like to add one more piece to his philosophy: the fundamental analysis.  The stock has to be undervalued for it to be a good buy.  Just like you buy clothes or food on sale, if a stock is on sale people will be more inclined to buy it. 

Market Update 7-26-12

Sorry I’ve been offline for a couple of days but I’m waiting for the market to stabilize before I jump back in.  The market wants to go up but it is fighting the negative news in the media about Europe.  Apple’s news about lower earnings caused a dip in the market and the lower earnings on some other key companies have caused the market to sputter as well.  Despite all of these factors the market is still trying to push upwards which shows that once we get some positive news there will be a rally.  

Walmart made an interesting move upward today as it broke through the $73 resistance that has been holding it back.  I’m going to look for a pullback tomorrow and then get in.  The break through shows that buyers are comfortable watching it going a little higher so when it pulls back I’m going to possibly build a position.  

GE has been showing a lot of strength through the recent dips in the market.  It always seems to come charging back looking to break through multiple resistance lines.  I may look to scalp some of these moves as well.

There’s just a lot of negativity floating around in the news that seems to have a big impact on the market.  Because of the many scandals (LIBOR, MF Global), the fund mismanagement (JP Morgan), and the highly visible Facebook gaffe, there is a considerable lack of confidence in the market from retail investors.  This affects the movement of stocks as well but it seems like from a general perspective most stocks want to move higher despite the bad vibes.

Market Update 7-25-12

So my recommendation for the current time period is to do small scalps.  If you see a stock that has relative strength over the past few days and it sells off because of the normal panic in the markets wait for the bottom and start building a position when you see some green candlesticks.  Then once it gets back to half the level that it sold off at, sell it.  Even if it’s a small profit, you’ll feel good about making money in the market and at least you are headed in a positive direction.

With Apple’s big tumble yesterday and the market in chaos over Europe, it’s hard to build positions and make any large amounts but you can still do the small plays.  Just be careful to not stay in any trades long term.  The market could nose dive at any time when things are this skiddish.

Market Update 7-24-12

I’m just getting into the trading day. Got a late start today.  I’m somewhat out of the game for a moment until my previous trades come up.  I have to practice the rules of money management and keep a percentage of cash in my account.  In the meantime I’m practicing with a bunch of other traders on a great learning platform called Super Stock Jockey.  It’s on Facebook and even kids in classrooms are using it.  Look for the game on Facebook and check it out.  I was in second place for a short while yesterday so that felt good.  The other thing about the game is that they offer prize money so check it out if you need money to get started trading.

Market Update 7-24-12

So the market can go in any direction today because of the news on the Euro going to some really low levels and the continuing talk about Greece and Spain.  There’s also the possibility that the market could bounce because there was a lot of short selling going on in premarket trading and because people are moving their funds into the American markets away from overseas markets.  My thoughts are that the market is going to bump up for the first 5-10 minutes because many stocks are at their support levels.  I am going to wait and see what happens and then wait for the 9:50am reversal to maybe take a position.