Wednesday, December 17, 2008

Range Bound Trading 12/17/08

What signs have we seen at Trading RM that we are in a range bound market?:

  • When I feel like adding to my longs or shorts they stop working.  That feeling of adding and pushing was correct in September and October.

  • The Trading RM Oscialltor is sloping down.  (see below post)

  • Increasing frustration on our trading desk

  • The SPX has been honoring several levels on upside and downside.  One of several charts that show this is posted.  920 on the SPX seems to be a top of one range.  Any longs in front of 920 this afternoon around 1:30pm cst were hurt on the afternoon mini sell off. 

What lessons can we take away ...for those of us who are still trading towards the end of 2008ar?:

  • Book profits when you have them

  • Less positions

  • Be Active - sitting in a long or short for a long time is not working.  When the market sells off the strongest names are going down the most and vice versa.   Today we saw several REIT names drift up, pick up a little acccelration, then sell off sharply.  Below is the REIT etf, IYR.  Depending where you got in the up move was quickly erased.   Pick a REIT name they all looked the same today (URE, SPG, VNO, BXP, FRT, etc...)