Tuesday, October 21, 2008


Not too many breakouts or breakdowns at all. Therefore, I chose to share a few stocks on my long and short watch list for tomorrow. These trades are mostly 1-3 day holds and are in no way long-term positions (in this market?!). Even though the market is consolidating, that doesn’t mean all stocks are in a neutral range. It just means that there’s about an equal number of stocks that are heading up and heading down. The key is to find the most reliable patterns because if a breakout of breakdown did occur, stocks “on the other side” mostly do not immediately move that way but continue in their prevailing direction for several days. This is especially true for short positions. This is why you still see a lot of breakdowns on up days…people still want to get out.

The day was volatile as usual and those who cannot stomach the volatility should be in cash until the market makes up its mind as to where the heck it wants to go from here. The whipsaw or the wild swings will only continue. The longer we consolidate, typically, the larger and more forceful the breakout or breakdown. Or, the market can just sit around in this range for a long time and do whatever it wants to do.

Don't forget to try the Free Trend Analysis. It's FREE, so give it a shot!

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