Pretty big downside reversal in the markets yesterday.. After the morning euphoria, the Dow went over 100 points off its morning highs.. and negative on the day.. before recovering just a bit into the close.
There were nearly 2500 more advancing stocks than decliners this morning.. That figure hit zero before recovering to 800 at the close. Obviously a ton of eager morning buyers had the rug pulled out from under them.
I’ve now been around long enough to witness several news-related buying panics. On most of them, the market opened up big & then gave it all back (and then some) by 4pm. The day Saddam was captured was a monster reversal, and this pattern has also occurred after countless “great” monthly employment reports.
Days with hugely positive news are usually the worst times to buy. It will never be that easy!
Monday afternoon I added a few longs for swing trades: PRFT, SPIR, MKTY
In the longer term port, I’m about 25% invested / 75% cash. I have no shorts in play at present.
Long positions include:
OII - oil rig repair
URS - energy infra engineering
CBI - ”
TKP - ”
BECN - roofing supplies
EFJI - emergency radios
N - world’s largest nickel producer
OXPS - online brokerage
PWR - power/telco line repair
Rev Shark, a contributor for realmoney.com, just made a post that summarizes “what’s working now”: Sitting Tight With Energy, Small-Caps and ETF Hedge.
The market’s reversal today will keep the long side dicey for a while. Plus I’m still trying to get back into the flow of things, after 2 days away. I’ll be remaining patient and awaiting better pitches before building many longer term positions.
RevShark is the only reason I maintained a subscription to realmoney.com as long as i did. if i were to subscribe to any paid info service now, it would be IBD newspaper and/or SuperTraders.com, Rev’s real-time chat room.
Or quite possibly Trader Oz’s chatroom at traderoz.com.