Thursday, November 29, 2007

Fork in the Roadkill

Sentiment has been nothing if not fun to watch recently.

The excitement of the new-found market following yesterday's rally was a potpourri of dum and dummer analysts and TV heads stumbling over each to welcome back their forever and permanent bull trend higher. The contrast from their sullen spirits on Monday was striking.


OK, we were backing and filling in the market early today, which is no shocker given the magnitude of rise yesterday, but the market has managed to reverse higher; nothing really spectacular either way.

As intended, I backed out of 75% of my exposure by the close yesterday and am staying settled-down just now, content to watch the leadership define itself and wait for the set-up for a follow-through confirmation day (O'Neil variety).

Yesterday was huge for me and I traded like a fiend throughout the session, but I did botch one thing up badly enough. Against my earlier plan, I dumped the FSLR position at the end of the day. What a dope! It could not move to higher-highs in the session, which put me on guard some and then when the name saw succinct pressure in the last hour, well I blew it out for a 1.5 point gain..!

Today, quite naturally of course, FSLR and the solar group as a whole are charging the moon. 1.5 points there isn't even enough to tip the waiter. It was up almost 25 an hour ago.

SOLF, which is no leader in that group, gapped-up a ridiculous amount on earnings and got the group going. The problem is you cannot be assured that a catch-up move in SOLF was going to be significant, since SOLF has been a dog among kings. I tried getting back the FSLR in the opening minutes, but it got away before I realized I needed to chase it. So I tried then getting a hold of YGE, but that vaulted into a moonshot as well. STP in the group managed new highs today (something to note) and JASO is back in vogue.

Anyhow, with me or without me, this group remains the hot money.

What am I doing about it? Well, talking to you I guess. I'm just leaving it all alone. I might pull in some YGE near the 10-day m.a. (currently 26.46), but I doubt that will be seen again today. In fact, if it sees that level late in the day I will likely just pass on it anyway. However, to get this name as the 10-day catches up to its price might be a fine and reasonable entry; we'll see.

As far as FSLR? This goes right back into the bag of potential stocks to trade long as soon as I can see the reason to fire further-long at the market.

You might consider this silly. Why not just buy these things if you are bullish and they are hot? Well, you are probably smarter than myself. But I really don't care what I miss - they can shoot the moon and I just smile. All I require is that when I am on-board (long or short) that the names I fire at are working. I won't get the market right every time (HA!), but I intend to get more meat out of the winning positions than is flayed out of me with the losers. With that formula I don't have to be right even half the time and I still come out ahead.

So for now, it is back to the Pacific, holding lightly long while watching and learning in this new and exciting bull market. I'm making fish-flake tostados just now, chewing on ginger snow-squab and waiting for the follow-through to set-up.

If we don't follow-through...well, we get bearish instead. But at this time of the year getting bearish means getting out and doing nothing. Tis no longer the season for Billybear and we made some kind of a bottom now in stocks; at least.

More on the follow-through watch as it sets up. Technically it cannot come before Friday's session (meaning we are not allowed to trust it until at least Friday's session), so let's trade light and eat heartily in the meantime!

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