Wednesday, December 30, 2009
ACCESSIBLE TERRAIN
The Market and the SMH
The market ended flat for another day as traders attempted to make up their minds about the last break out move we had and how to position themselves, if at all, for the first of the year. The volume was paltry which tells me most minds have already been made up so time for the new year. However, it does look as if the market is going to try and close at the highs of the year on the last trading day of the year. The NASDAQ has been the strongest index with a huge break out from the tight range we were in. The SMH position I mentioned the first week of December as a MISSILE LAUNCH play is near its profit target as it has been carried along with the NASDAQ breakout. Many of you may have already taken your profit here and if you haven’t you may need to consider doing so as this ETF has had a great run up to possible resistance on the WEEKLY chart. Traders should always set profit targets along with loss targets with the realization that profit targets are just that: targets. And just because you do not hit a bullseye every time doesn’t mean you should not be happy with a few points outside the black circle.
Logic vs. the Market
Keep in mind too that the market is going to do what it wants to do anytime it wants to do it. Did you get that? I say this because in the last few days I have received many emails from those who have held the opinion that in the face of all that is wrong in the world there should be no reason for the market to go up. Oh yeah? This is the same logic that kept traders either out of the market since March or on the wrong side of the trade. These are the same traders who will hold on to long to their long positions and miss the downside when the market does decide to correct which, by the way, will eventually happen. My logic: trade the logic of the market no matter what it is. This is the only way you are ever going to make money trading so stop thinking about what the market ought to do and trade what the market does. I know it is hard to do but save the logic for the dinner table.
BATTLES WON (PROFIT TARGETS HIT): NONE TODAY
BATTLES LOST (LOSS TARGETS HIT): NONE TODAY
NO NEW ENTRIES TODAY.
