Wednesday, March 3, 2010

Still overbought

I am tired. I grow weary. I need, and certainly deserve a break. Well, that's how I feel about the markets right now. Maybe its got something to do with the fact that we haven't really got anywhere in the last couple of days. Maybe the fact that I have traded more than I usually do in the last one and a half weeks has something to do with it. I have a feeling its a bit of both of the above. And this blog is certainly not helping in this regard. Over 100 posts in less than two months. Whatever it is, I did not really enjoy trading today. And no, it had absolutely nothing to do with P/L. Normally, I watch the bid-ask all the time I possibly can, even when I don't have any positions, and I absolutely love it. But today, I didn't. 

Anyway, the markets didn't go much today. Not surprising at all, as I mentioned yesterday the markets were overbought. There are a couple of ways to get from overbought to "normal" - Sharp pullback or slow consolidation. The latter is what has happened in the last couple of days and the bulls should really have no complains about that. We are still at overbought levels, in case you were wondering.

Here is a question for you guys....Almost all the blogs are there expecting a pullback and are ready to buy on dips. The bears of course, want a pullback for obvious reasons. So, if everybody wants a pullback, will a pullback really happen? Think about it ;)

Personally speaking, I got out of ATLS at 34.75 for ~ 2.7% gain. I took a position in PAL at 4.18 and then added more at 4.25. I thought it looked good to run but it was stubborn and closed at 4.21. I was feeling confident that we were headed lower and wanted a hedge for my long positions, so I shorted ATLS at 35.03 which closed at 34.39. Yes, the same ATLS. I was long it heading into today and am short it at the end of the day. The joys of being a short term trader! I plan to get out of both ATLS and PAL within the first 5 minutes of the trading day tomorrow as I won't have time to watch the markets till noon after that. Which is quite fine with me as I do want to take it easy the next couple of days. Its been a decent week and my plan is just to protect my gains.

I posted a chart of MDVN earlier this evening. Check it out if you haven't already done so. I will be back sometime later tonight just talking a little about how you can "protect" yourself against situations like these.

Take care and good luck tomorrow!

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