The beauty of being a short term trader

Posted by downtowntrader | 8/16/2006 08:21:00 PM | 0 comments »

One of the biggest advantages of being a short term trader is the ability to switch sides quickly. While I've been expecting the markets to continue the downtrend, it doesn't make a whole lot of sense to fight the tape. I had been expecting a summer rally and maybe it is just a little late. Whether this is a real move, options games, oversold bounce, manipulation, it doesn't really matter, because lots of money can be made to the long side on days like this. The other nice thing is that there will be some great short entries when this is all over.

Here is a chart of the SP500 showing the breakout that I thought failed. Interestingly, the target for the reverse head and shoulders takes it to new high territory.

Here is a chart of VIVO which was a great short for me. I am keeping an eye on it as it may set up for a nice short entry in a day or two.

Same deal with KOMG. Another two or three days of rallying would be ideal.
Natural Gas stocks have fallen a little off the radar but the sector still looks good. Here is CHK's weekly chart. It is wedged between two previous trendlines.
TRMB had a nice reverse head and shoulders breakout and may now be ready to clear the entire base.
TNL looks like it is clearing this small consolidation.
ICE appears to be breaking out of a triangle reversal pattern.

Keep in mind that options expire on Friday and may bring a counter move. Also, I would be a little wary of trying to chase tech stocks after 2-3 days of rallying.

Good Luck,