Stock Trading Ideas

Another Low Volume Trading Day…

Stocks see-sawed through a dull day as major indices ended the day in a positive territory. Total volume on the NYSE is ever decreasing while volume on the Nasdaq was a bit higher than seen in recent days. Market internals were positive with advancing issues edging over declining issues. But with volume so low, a 2% up or down day on major indices wouldn’t make a difference. The reason volume is such an important factor is because it gives a sense of conviction that the big money is supporting or distributing the stocks in the market. As I highlighted yesterday, the market is in holiday mode and might swing up or down but don’t expect the real direction of the market until next week.

My scans are showing that majority of the stocks are in no-man’s land. Even the strongest stocks from the healthcare and biotechs are pulling back from their recent highs to 20/50 DMA support area. I would like them to wiggle around the support, shakeout the weak hands and breakout again on strong volume. Buying stocks near their support on big breakout is highly profitable. With the kind of market we are experiencing you might have to baby-sit your open position as it can reverse with a blink of an eye.

Commodities, financials and homebuilders had a nice day today while airline stocks were the biggest loser of the day.

I have been trading lightly as there is not much action in the market lately. I will try to keep it light until next week when we expect to see some volume after the holiday weekend.

Trade lightly or take a break!

Jim Cramer’s Fan: Watch This Seriously Funny Video

Stock Market Updates: Borrrrrrrrrrring Day

The indecision in the market and ridiculously low volume continues to puzzle many traders. Major indices had a flat day with nothing exciting showing up on the long side. The indices are basically in “no-man’s land”, trapped between near-term areas of support and resistance. But with big money out of the market until after the Labor Day holiday, stocks could very well remain range-bound throughout the rest of the week. I think we might even get a little bounce here as we head into the long weekend but I wouldn’t trade anything on the long-side right now. Short to mid-term, odds favor a down move. Retail have been acting good recently as oil has come down $30 from its highs.

Do you remember my recent post about emerging markets? I would recommed that you take a look at the charts of some of those emerging markets. Some of the markets are hitting multi-year lows and are melting down.

JPM in its regulatory filing said it held about $1.2 billion par value of Fannie Mae and Freddie Mac preferred stock.

Trade Updates: I was stopped out of my UTHR calls for a small loss as the stock broke down below its 50 dma. I will wait and watch UTHR and CELG to see if they rest here near their 50 dma or break down.

So far, I hold MON puts, MOS puts and BTU puts. Lets see where it takes the portfolio…

Trade Updates: BTU, MOS

I was stopped out of my BTU puts and had to re-enter it again. Bought 20 Oct 55 Puts @ $2.40. I also added MOS 5 Oct 95 Puts @ $5.20.

MOS was highlighted in this week’s watchlist and is one of the Stock Trade Ideas. It is having hard time to break through the 200 dma wall of resistance and could be shorted here with a stop above 50/200 dma at 110.