Staying Open Minded
- Posted by downtowntrader
- on March 14th, 2011
While I’ve been increasingly bearish recently, I have to admit I am finding some decent charts to the long side in my recent homework sessions. I’m not ready to start committing too much capital to these ideas yet, but I am patiently adding these stocks to my watch list. The indexes remain very vulnerable here, and the possibility of a much deeper correction is still pretty high. The markets have been under distribution for the past few weeks and the participation in the rally has been decreasing for the past several months.
However, one of the most important traits for a trader to have is the ability to remain disconnected and staying open minded to all possibilities. Despite the fact that the markets may be headed lower, I remain open to the idea that the market could find footing near current levels and head higher. There are multiple scenarios that could unfold, including a shakeout lower, a shakeout higher, or anything in between. The Mclellan Oscillator, which is one of the short term indicators I follow is starting to get to oversold levels.
While no indicator is fool proof, I would at least be very leery of pressing shorts when this indicator gets below -150 through -300. My preferred approach is to sit mostly in cash here and wait for either a quick plunge that would setup a good opportunity for a snap back rally, or even more prolonged sideways trading. In either scenario, my preference is to stick with what is strong, rather than trying to find value in beaten up stocks. Some of the stocks that I think are worth tracking are (no annotations necessary):
Baidu, Inc. (Nasdaq: BIDU )
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Joey Fundora is a private trader who has been trading for over 8 years. Joey specializes in discretionary swing trading of stocks almost exclusively through the use of technical analysis. (More)