Friday, November 16, 2007

Sleeper Waves

I was out of town today. Out of sorts and out of mind, I suppose.

Being almost entirely sidelined since mid-session yesterday, I was content to basically check-out, keeping abreast only in case we were setting-up for a break of recent lows.

But that didn't occur, even though we had a smattering of negative news to fuel new selling. Wall Street's brighter faces got to smear hopeful lip gloss all over again. Nothing unusual.

I was off the coast of N. Alaska all day, hunting polar bear and clubbing baby pup seals, but otherwise - no carnage to speak of.

Actually, it could have been a good trading day, seeing we opened up, reversed quickly down, reversed up again, then down yet again, but ultimately reversing up (yet-yet again) and closing higher at the end of the day.

All of this was on higher, option-expiration volume. zzzzzzzzzz.

Anyway, I don't really care about participating in any potential upside at the moment, as the risk remains too high vs. (what I see) as potential short-term reward. If we're not falling apart again by later next week, I will certainly trade a couple of leading stocks long for the US post-holiday session on Friday (generally this trade is best placed the 2nd-half of trading on the pre-holiday Wednesday and then sold late in the shortened-session on the next trading day, Friday.

But that's a mighty long time from now. From Monday until the first half of Wednesday I'll focus on the shorts and whether the sucking sound looks ripe to continue. Should we manage to re-approach the recent November 12th lows, I will get very active, very quickly; shorting as we approach those levels and then firing as much as I can fire upon breaking below there.

So basically, I am going to react to the market here. I'll lay off the short-snorts as long as we are rising or hanging tough in the face of further negative news. If we rally sharply, I will likely take some shots, depending, because I do think you can and should sell strength into this market. However, selling strength is really best for those stuck long. For the short bully's like myself, selling failure is where it's at.

Good weekend!

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