Market Day 5/13

New day,

PWRD is down $1.30, or 4% as I'm typing right now...I missed the short trigger by 40 cents yesterday. One opportunity lost...I will keep a close eye on it.

Visa is up today. It is now resting on top of the 20DMA and solidly over the 50. We should see good support for the stock even on down days (such as today).

This is what I'm talking about though...the markets will jump up huge to get as many bulls on board as possible, and then reverse the other way back. We are most likely going to be stuck in a ranged trading on the indices (at least for the Nasdaq and S&P). The Dow is interesting however because it is right now on the 20DMA and it's looking like the support may break away. With the 200DMA right on top as heavy resistance we could see a lot of selling pressure coming in.



The thing to keep an eye out for right now is how the technical indicators have receded already well off its highs. So a rebound is critical, but given how the 200DMA is coming down, it might be a very big challenge to get the Dow Jones moving up. 13,000 is going to be a tough resistance to get past.

If the markets are meant to go down, then it all comes down to stock picks and sector choices. Just because the indices go down doesn't mean every single stock goes down with it. Pick your spots and stick to the discipline.

Let's see how the day unfolds.

-DL

Disclosure
Long GOOG, V
Short USO


Update 1:

USO just spiked bigtime very impressive action. I am down a couple bucks on the trade but my position in the short is small. Contemplating on adding more to it...

Update2:

Wow did I miss out on the PWRD short, down nearly $2 bucks at the lows of the day! The stock is now right below the 20DMA, on any fakeout strength tomorrow I'm going to put on a short and ride it potentially to 26. This one could be a big winner, pay attention to it.

Update 3:

I am selling some Visa today (Just a small portion) to lock profits. I have absolute conviction to the stock, but at the close today I noticed a very disturbing chart pattern forming...so I could potentially be buying at a discount. I know I said it'll hit 100 and I still believe it will, but in addition to the position I'm holding in my IRA I intend on trading around the volatility as well.



Note this is a 2 day 10 minute intra day chart.

- Negative momentum forming
-Confirmed breakdown from moving averages (There is no bottom after this until all the way to $77 - the 20DMA from a 3 month perspective). And it is going to take the 20 and 50DMA a few days or weeks to reach back down to the high 70's to act as support.
- Extremely light volume trading (notice the near non-existent bids, but note the final 20 minutes of trade that showed increased volume selling.)

So I still have a position left in it, but being a swing trader I have to keep it real. The point is to lock as much profit as possible and utilize every advantage we have to beat the markets. Even though I like the company, they're still after all just a money making vehicle. I have no emotional attachments to them. So if I am wrong, I will still profit from my existing position. If I am right, then I will be able to buy this great company back at an even greater than anticipated discount. My first buy was at 72, last buy was at $79. I locked profits near the close of the day @ $82.30. So $10 profit locked. Not too bad at all for a trade I've had since 5/1/2008 (12 days).

Let's see if Visa will retest its 3 month 20DMA or even lower. Thats when I will look to pull the trigger again.

I'm curious as to how some of you readers thoughts are about the market. Please share with me your insight. And let's make some money. If this year so far have taught us anything, it is the markets are more volatile than ever before. And as long as we accept both the bull and bear story and be smart about our executions, we will have the opportunity to make double the returns or better yet save ourselves from the pain of seeing gains evaporate.