Daily review - Jan 11, 2010

Before, I go into the trades I made today, here is a quick question - Does anybody else seem to think the markets are looking a little too "easy" to trade? I have added a poll to the right of the site and your opinions are welcome!! Look around you, whether on blogs or twitter, and you will see what I mean. Everybody is talking about breakouts. All momentum stocks seem to be breaking out. Hardly anybody seems to be talking about shorting stocks. Remember, not so long ago, when FAZ was the flavor of the season? The market just seems to be ignoring all news and on its way up. That's what I mean by too "easy".I dont know about you but this makes me nervous. I am still not venturing into the short side, but have cut back into my position sizes. I had a very decent day and am not complaining, but am just going to keep my positions small and stops close until I am a little more confident about the market in general.

The first trade I made today was getting out of my position in NEP at 10.75 for 7.5% gain. If you have read my introduction, you know this is a favorite stock of mine and pretty much the only position in my long term account. As a trading stock, I rather like the way it is consolidating after a massive run up. I would like to see a more lengthy period of consolidation around this middle 10 area before it tries for another move up.

Then, I sold half my position in XRA for 9.04 and got stopped out of the rest at 8.63 for an overall 3.21% gain. I am rather pleased with this trade, although I was much more ahead earier in the day, for a couple of reasons. One, I took profits off the table by selling half my position early to enjoy the rest of the ride. But unfortunately, rest of the ride didnt happen and my stop was met!! As I have learnt the hard way, it is much easier to take losses on a losing position than after a decent run up. I am glad I could keep my stop loss even though it was a mental one.

Now, to the heart breaker of the day - PAL. I got out at 4.14 for a measly 1% gain only to see it run up and breakout after crossing 4.20, as I had predicted yesterday. Damn!! There is nothing worse than losing money inspite of being right!! I managed to get back in at 4.30. It closed at 4.46, a 10.67% gain today and even a 2.5% gain since I posted about the breakout and called it a buy during the day.

I got into SWC at 12.62, a perfect buy point even if I say so myself, something that doesn't happen to me very often!! I shall explain how I almost managed to catch the low of the day and do an update on SWC and PAL later today evening, or tomorrow morning. Palladium still looks good to me.

All in all, a decent day really. But the feeling still lingers - Doesnt it seem a little too "easy"? Are we close to topping??

Thanks for reading!