fyi… both DEST and DDS have now hit their first targets so depending on your own trading plan if you took either of these, consider taking partial/full profits and/or moving up stops to protect profits. always have a plan before you enter a trade as to where you plan to take profits and where you plan to place your stops. it’s fine if you have a dynamic plan (i.e.- take partial profits at an early target and then re-assess the position for future targets and adjust stops accordingly). several existing shorts may also be near suggested stop points so make sure to be to be as diligent with your stops as you are with your entries and profit taking. typically, i will use daily closing levels (often depending where a stock is about to close just a few minutes before the bell) for trades based off the daily chart as well as candlestick closes on the intraday charts commensurate with the time frame that the trade was based off of (e.g.- a 60 min channel break would have a stop on a 60 min candlestick close back inside of the channel).
regardless of multiple technical sell signals, this market continues to show aggressive buying on the dips, clearly showing that it is still a market in accumulation mode. the day is early so let’s see if this post-opening run-up is answered with some afternoon selling or not. individual stocks and sector etf’s continue to be the most successful trading vehicles lately vs. the broad markets which although seems very bullish because they’ve yet to have a decent correction, really seems to be stalling out lately and have made little, if any forward progress from their highs in the last week or so. market breadth is positive so far today but it’s the closing numbers that matter so consider to continue keeping things light for now (not fully invested) until the market offers a better R/R profile in either direction. on the long-side, that would be a healthy correction down to a good support level with the technicals pointing towards a likely bounce. on the short-side, that would be a very impulsive sell-off that smashes thru a couple of key support levels with other bearish technicals remaining in place. personally, i continue to favor a hedged (long/short) portfolio comprised of the best looking long and short trade ideas, for more experienced traders and a partially invested or large cash portfolio for less nimble/experienced traders. i know it’s hard to sit on your hands while so many stocks are make big moves lately but trading is all about recognizing when the market offers the best R/R profile, where you should be actively engaged, as well as when the R/R profile is not very attractive, regardless of the current trend or price action. examples of this would be trading the long-side aggressively back in oct ’07 or early may ’11, when it looked like stocks would continue to go up forever, or continuing to trade aggressively on the short-side going into march 2009, when it looked like the world was about to stop turning.