December 13th 2007
Top 5 Trading Ideas for 12/13
Should be interesting to see what direction the market picks going into the Christmas holiday. We’re in a corrective bull move from the drop that started on 11/7. The major indexes are caught between their 50 SMA and 200 SMA. The Dow and NASDAQ need to move back into the 50 SMA and off the bottom of the channel. To be honest the channel looks ominous. At best you’re looking at a channel that will break to the upside. At worst we’re looking at a bear flag. I guess it’s not necessarily bad price action. It all depends on what types of setups you’re looking for. I threw in a potential short for idea #5. You always need to be ready to take a trade in either direction.
Here’s the Dow w/channel
NASDAQ Composite showing similar action.
So what’s the best course of action. You can always scale back your trading. As we get closer to the holiday, I like to slow down and start doing my goal setting for next year. I’m always doing analysis and looking for trades, but it’s time to start setting my sights on what I want to happen next year.
1. BIDU
2. MO
3. VLCN
4. DISCA
5. RIMM
You always need to be ready to have setups on either side of the market. RIMM is looking to be a good short if the market tanks.
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4 Comments »
My Trader's Journal on 13 Dec 2007 at 12:41 pm #
Nice charting (again). I’m not sure I agree with your lower trend line for $INDU though. If you start with the breakout day (the day after you started the line) and stick to the lows as you climb, you’ll see it broke yesterday and today seems to be a confirmation day. I hope you are right, but I’m being more cautious on it.
Jonathan on 13 Dec 2007 at 12:52 pm #
Good Catch. That lower trend line is probably wishful thinking on my part.
Jack Payne on 14 Dec 2007 at 2:42 pm #
My big question for next year is what about the election? If the Dems win and take over Congress the cap gains advantage may disappear virtually overnight. In my view this could throw much charting out the window.
Jonathan on 14 Dec 2007 at 8:05 pm #
If the Dems win the election, I’ll be more worried about socialized medicine than anything else. Charts will always provide at least an indication of where things are likely to head. Institutional trading is too large to hide.
My biggest concern is the cost of “free healthcare”. What new taxes am I going to have to pay so some fat slob can sit in front of his big screen TV, go to the doctor for free, and collect welfare all day.