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Monday, February 23, 2009

A good day to be a trader...



Another bad day to be an investor.

NEW YORK (CNNMoney.com) -- The Dow and S&P 500 tumbled to levels not seen in nearly 12 years Monday...The Dow Jones industrial average (INDU) lost 250 points, or 3.4%, ending at the lowest point since May 7, 1997.

Dow and S&P at 97'Lows

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8 comments:

sunyata said...

Hey everyone,

Few questions about some plays today (Tue, 24 Feb). What do you think about MVL as a top-out play? My first inclination was to short on the break of the 3rd bar, but it looks like it was a push-thru setup instead. Probably less likely to be a top-out since 3rd bar did not close below 75% mark. Second play, PWR. Does this qualify as a perfect pullback play, despite that it pulled back BETWEEN the 75% and 50% levels? Thanks!

Didn't really catch much today. HNZ was an awesome perfect pullback.

Peace!

Tyler said...

Hey Sunyata,

You are right in not shorting MVL, it looks like there was some support at the halfway point rather than resistance. The others, PWR and HNZ, look like pretty good trades to me.

If I remember right, Trader X has mentioned that sometimes they won't pull all the way back to the 50% Fib Retracement, so might be higher risk.

Also, I wish my scanner would have pulled those up. Nice looking charts.

Tyler

sunyata said...

Hey Tyler,

Thanks for your response. Learning something everyday! What scanner do you use? What I find most helpful for me to do is, prior to the open, I go through the articles on Yahoo! and put in a basket names with earnings or significant news, especially if they are up or down pre-market. Then, after the market opens, I'll delete those that did not gap signficantly. Secondly, I've found that Yahoo!'s Stock Screener (the Java version) is really good at finding gaps after the market opens. The server updates the quotes between 9:40 and 9:50. This is how I have been finding the best quality gaps in the morning.

Best to all!

Tyler said...

Sunyata,

Right now I use a basic formula for percentage above/below the PDH/PDL in TD Ameritrade's StrategyDesk. Looking at the candidates you get from Yahoo!, I think your method might be better.

Tyler

JF David said...

PWR and HNZ are beautiful pullback setups, better than RIMM (I went long on the break 4th candle high.)

The hammer on RIMM was a little bit to large, but I took the trade anyway.

armo70 said...

Hi

I agree, HNZ ticks all the boxes, nice pull back, and on my chart, the 4th bar hammer\doji type bar bounces right off the R1 pivot line. I know X no longer uses moving averages on his charts, but I still use the 5ema and on the HNZ chart I like how close the pullback gets to the 5ema and then bounces off it - one of these a day and we'd be laughing - if only it were that easy :-)

armo70 said...

Hi Sunyata,

I personally wouldn't have shorted MVL as a "Top Out" - it just doesn't look bearish enough to me, the second candle is quite strong,and that along with the fact that the third candle didn't close below the 75% mark would put me off. Something I've noticed from my own research into these type of trades, (and this is only a very short time so it may or may not be significant), is that the setup seems to be more reliable when the bearish entry bar (the 3rd in the case of MVL)closes below the close of the previous candle (i.e. it closes within the body of the previous candle and not above. Like I say - I'm not sure whether this is relevant, but it just seems to be a pattern I'm picking up.

thanks
Mark

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