Marketwatch.com has recently been trying its darndest to provoke a market crash by highlighting every analyst and financial writer that feels a significant selloff is due (all 10 of them). Instill enough fear and it can become a self-fulfilling prophesy. All it will take is some news story to give everyone an excuse to take profits. It almost started a few days ago when a Portuguese bank appeared in trouble. Yesterday it was an airliner that came down over a war zone.
I try to ignore the news and ‘the sky is falling' articles for short-term trading. I listen to the charts. If after looking at a hundred or so charts of top name companies I see a number of them showing signs of institutional accumulation, I concentrate on finding high probability bullish trades even if the overall market is showing weakness.
If I see several of my previously strong trades start to weaken in unison, I call it a ‘cheese danish' situation. This means I will usually close out most or all of my short-term trades and the next morning go down to Panera Bread for a coffee and one of their wonderful cheese danishes, come home, and watch the market open as an observer, not a participant.
Today is a ‘cheese danish' day. Three of my current favorite stocks have failed at important junctures in their charts.
O'Reilly Automotive (ORLY) recently set a new high after a lengthy consolidation. If the current market weakness quickly dissipates and ORLY breaks to a new high, a nice cup-with-handle pattern will have formed. But we've gone three months now in the S&P 500 with no noteworthy pullback, so I am hesitant to stay in the ORLY trade.
Starbucks (SBUX) broke to new 6-month highs, but it too has decided to retreat.
Stericycle rose strongly to the top of its year-long trading range, but couldn't muster the strength to break out.
Many other charts I've been watching are in similar situations. And so it is time to become a spectator, instead of holding active positions. It is a ‘cheese danish' day.
(Actually, Panera calls it their ‘Cheese Pastry', and for those interested, it has 400 calories, 22 grams of fat, 330 mg of sodium, 44 grams of carbs, 1 gram of fiber, and 8 grams of protein. But I don't worry about that on a ‘cheese danish' market day).
Of course, there's much more you need to know and many more stocks you can capitalize upon each and every day. To find out more, please click on the following link: www.markettamer.com/seasonal
By Gregg Harris, MarketTamer Chief Technical Strategist
Copyright (C) 2014 Stock & Options Training LLC
Unless indicated otherwise, at the time of this writing, the author has no positions in any of the above-mentioned securities.
Gregg Harris is the Chief Technical Strategist at MarketTamer.com with extensive experience in the financial sector.
Gregg started out as an Engineer and brings a rigorous thinking to his financial research. Gregg's passion for finance resulted in the creation of a real-time quote system and his work has been featured nationally in publications, such as the Investment Guide magazine.
As an avid researcher, Gregg concentrates on leveraging what institutional and big money players are doing to move the market and create seasonal trend patterns. Using custom research tools, Gregg identifies stocks that are optimal for stock and options traders to exploit these trends and find the tailwinds that can propel stocks to levels that are hidden to the average trader.
The content on any of Market Tamer websites, products, or communication is for educational purposes only. Nothing in its products, services, or communications shall be construed as a solicitation and/or recommendation to buy or sell a security. Trading stocks, options, and other securities involve risk. The risk of loss in trading securities can be substantial. The risk involved with trading stocks, options and other securities are not suitable for all investors. Prior to buying or selling an option, an investor must evaluate his/her own personal financial situation and consider all relevant risk factors. See: Characteristics and Risks of Standardized Options (http://www.optionsclearing.com/publications/risks/riskstoc.pdf). The www.MarketTamer.com educational training program and software services are provided to improve financial understanding.
Related Posts
Also on Market Tamer…
Follow Us on Facebook