The choppiness continued on Friday as the indices fell below Thursday's lows and stayed there all day until a last minute surge of buying pushed them back into the recent range. Right now, in the pre-market, the QQQQ has gapped up and is hovering right around the highs of the last few days. Briefing.com says that today's gap is because "the Iraqi elections came and went better than many expected while OPEC also left production quotas unchanged." Whether or not those are good reasons I'll still pay heed to my #1 Rule. Here's an intraday chart of the QQQQ over the last few days which shows the gap right to a resistance area:
In addition to my normal caution about gaps there are several other reasons that I'm skeptical of this early strength. This week is loaded with events that should affect the market. I normally don't initiate swing trades ahead of Fed meetings so that will keep me in day trading mode until Thursday morning. Then we've got a jobs report due to be released on Friday, so I see little reason to initiate positions ahead of that either.
Here are some things to check out today:
- Jaloti has a nice collection of weekly charts. I would have drawn the trendline on the Nasdaq chart a little lower (through the August 2004 low), but either way the uptrend is still intact.
- BusinessWeek has an article about "Finding Value on the Net".
- Alan Farley's "Day in the Life of a Trader" (not a permanent link.. page may change at any time)
Currently holding:
Long - None
Short - None
Looking for swing trade entries in:
(I probably won't do any swing trading this week but here's what I'm watching)
Longs - HSIC, ITG, MON
Shorts - CYMI, INFY, IRF, LEA, SMH
Potential day trades:
(From Briefing.com)
Gapping Down
T -5.6% (board approves merger with SBC), WYE -5.4% (misses by $0.03, ex items; guides Y05 EPS below consensus), FLSH -3.5% (reports Q4).
Gapping Up
NVEC +18% (agreement with Cypress results in MRAM samples), OSTK +4.2% (First Albany says OSTK is among the most compelling growth stories in the Internet), CREO +14% (to be bought by EK), GEPT +14% (gets FAA certification), CNLG +12% (receives military contracts), NOVN +10% (RBC upgrade following FDA's decision to reject the citizen petitions seeking to delay), DAL +8% (Merrill upgrade), AIRT +7.3% (reports DecQ), DCTH +6.4% (NCI reports encouraging results with Delcath therapy), MMC +5.8% (agrees to pay $850 mln to settle bid-rigging probe - Bloomberg), ELOS +5.3% (to file 510k application for marketing clearance of the VelaSmooth device), RSAS +3.4% (Raymond James upgrade), FRO +2.8%.... Stem cell stocks are strong: STEM +4.7%, ASTM +4.1%, VIAC +2.7%... Under $3: MSTRW +100%, SMD +23% (reports Q3), BIOM +7% (to present at conference).
Thanks Mike for the link
Check out Jaloti's haiku
Today's a good one