This week is flying by as work continues to be extra busy. The AFC title game fast approaches.
Why Would I Buy?
I am going to skip the charts and related stuff. It's a difficult time right now to trade, not because things are NOT working but because things ARE working and that has not been seen in some time.
I opened long positions in 4 stocks today (NXTM, ANSS, CRESY, INTU; charts were up last night) even though there are a few indicators I follow that are flashing warning signs. Why would I do that?
Is this the cusp of a great new bull run to new highs? Is it different this time in regards to debt problems?
I really don't know. What I do know are two things.
Over the past few weeks screens I have run have been returning winners. And I don't mean 1-3% movers here, I mean chunky grabs of over 7% and some big ones (holding time around 4-10 days). I have not seen that in a long time. I usually don't play some of the more aggressive stuff (solars, chinese burritos) so this move has included all kinds of stocks. Individual stock action has been null and void for some time. Now even as indices or sectors move down, other names and places are holding or being bought. I view this as favorable for trading individual names.
I have seen markets over the years run much further than I would have thought. Much further. Most of them have all started this very way. The December 2010 - early February 2011 run comes to mind. I don't know if this run will be as far or as large but it's moving now.
I think that if we are going to see a correction I will see that happening as my screens fail to return good looking set ups and my positions start to reverse and break down. It's harder for me to have a real feel for the tape if I am not in any positions at all. I am not over committed to the market here, but I am carrying enough spots to get exposure to the action.
Inflection points are very difficult to both see and accept. I was leaning pretty skeptical on this run but now I am more neutral. Of course that's also when tops form, the last few skeptics slide on over to optimistic. If I am wrong I imagine I am going to know in short order, my stops are set pretty tight. If I am right there could be a bunch more time to play good setups and trade this market. Right here, to me, it's worth a shot.
Have a good night.