Tuesday, December 18, 2012
Rinse and Repeat
Hope most of you caught the nice rally last couple days. We've have seen huge gains in across the board in last 2 sessions, mostly on the back of potential resolution on Fiscal Cliff. BUT we still don't have an agreement and no one is sure what it means to the economy going forward, which means enough uncertainty prevails. McClellan oscillator is back in the overbought territory, so caution is warranted. If we gap up higher tomorrow, most likely it will be sold into for proft taking. I'm also seeing lot of stocks hitting resistance levels which is another indication that market needs to digest some of the gains before moving higher.
If you are holding positions overnight, i would highly recommend lightening it up going into second half of this week. This is aslo an options expiry week so expect volatility to climb up in the market. If we get a pullback to 143.55 level, I would be buying with both hands for a potential run up into last week of December and January. I still have some long positions (incl AAPL, C, BRKB, ISRG, GMCR) going into tomorrow which are mostly swings i plan to hold into early next year, unless of course we see a huge weakness in the market.
There is a common saying amongst swing traders "RINSE and REPEAT", which means clean up your positions and wait for the market pullback to add and ride it higher.