Monday, March 23, 2009

Getting long

Remember that recession we had 2 weeks ago?  I am glad that is over.  So is this cat. 

The past 8-10 days I have been having trouble getting with the rallies.  I still have the 2008 mindset.  Today I did a slightly better job of recognizing the signs and listening to them.  Here is what I saw today:

1) My first short, CECO, did not work.  Education stocks, briefly showed their hand as weak out of the gates.  But they never made lows and were quite strong the rest of the day.

2) Upside news stories/takeover rumors kept going up.  Last year one could have shorted any sort of downgrade/bad earnings/negative story.  Recently we have seen these takeover stories have more upside room.  Some from today:

RHT - ORCL for RHT rumor
ILMN - takeover chatter
SWY -  Kr for SWY rumor
HNZ - takeover rumor

3) REIT setup later in day.  I like to look at the REITs as they have one foot in the financial/bank waters and one foot in the real estate/housing waters. 

Around 11:30 am cst I saw the following setup:  The S&P futures made a 10 point move down from 802 to approximately 792, then traded sideways for a bit. (top chart)

 Simultaneously, the IYR was making new highs.  (SLG/SPG/EQR etc... included).  I thought this was a decent time/way to get involved long today.  We saw IYR accelerate up into the close, along with many other sectors. (Bottom chart)

My GOALS for tomorrow:

  • 1 good trade at a time

  • Every trade upon review will have had good timing (not chasing)

  • Every trade upon review will have had good selection (names in play)