Wednesday, November 21, 2007

Look for possible rally around the afternoon

The market had a huge drop in the morning so this gives us 2 possibilities to trade today. This trade should occur in the afternoon where the market will either rally up or drop down further. I predict it usually tell us everything around 1-2PM. However, as long as there is a rally expect high volatile stocks to go up with the market such as C, BIDU, AAPL, etc. If it doesn't rally there is a choice to short them, but I would never do it at this point because they are already oversold due to market news and concerns.

I shouldn't be trading, but it is such a nice setup and a good way to make profit so I am going to wait and buy those 3 stocks when the market rallies. If it doesn't, I will wait for another day or so where I hope the market stabilizes.

One good indicator for rally is when Dow shifts from -160 points to -100. This will give us a nice indicator and we should have these stocks on our watchlist. And if there is a rally I would buy it and put a nice tight stop loss for a good risk/reward ratio.

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