Tuesday, December 21, 2010

Higher high on decreasing volume

Not too much drama today. SPX added 7 more points but the volume is decreasing which makes the short term time frame even more vulnerable to a possible small correction. 

SPX is now 10 points above EMA50 and 27 points above SMA 120. Market usually touches these moving averages so even a 27 points drop it won't change the bullishness of the intermediate time frame. 

Dollar continues to rise with the gold and the market. Most of the time dollar moves in opposite direction with the general market and there is almost a perfect correlation between gold and the dollar. Not this time! Even more confusing is that VIX went up today instead of going down. This is a sign that market  doesn't behave properly, probably due to the very low volume. On low volume anything is possible. 

My gambling on individual stocks paid off. I had a few good winners, MOH, MRDN, MDVN, DFS (on the short side) and especially VNDA that made me a very nice profit today, a "draw" SMSC and a loser, PERY (I shorted this one). I am still holding ETM (4% up since yesterday), CMN that moved against me today but the momentum is very bullish and RSYS, a crappy stock that I did short yesterday but it didn't move down as much as I expected. 

Trading individual stocks is time consuming and nerve wracking, that's why I am playing with very little money. If you're interested in some good candidates for a short "kill" let me know. There are plenty of stocks with very nice momentum out there but you should do the homework and carefully chose them and even more important look at the fundamentals. For the 2-4 days I am holding these stocks I don't bother with the fundamentals, the technical part is more than enough to let me make some money but keeping individual stocks longer than 2-4 days is risky without paying attention to fundamental data. With ETFs I am comfortable applying technical analysis only but not with individual stocks.

Have a nice evening!


P.S. A few stocks on my "buy" list for tomorrow. 

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