"The secret of reaping the greatest fruitfulness and the greatest enjoyment from life is to live dangerously."
-- Friedrich Nietzsche
It can be quite exhilarating to walk on the high wire -- safely navigating a dangerous situation and even profiting from it is a great feeling. The more often we are successful in profiting from a dangerous situation the more confident we feel -- and the more likely we are to take on increased risk. If we don't temper our risk-taking at some point we are sure to suffer a painful injury.
The stock market has been rallying for almost a month now and it's been no ordinary move. The Nasdaq in particular has been going straight up with hardly a pause. With each day that the move continues the likelihood of a sudden reversal increases. If we have been too cautious in recent days it has cost us big as some major upside moves have taken place. Do we stay fully invested and keep riding the powerful wave of momentum or do we become more cautious as the level of danger increases?
The answer depends on your style of trading and investing. I try not to be overly anticipatory, because I've found it extremely difficult to time market turns, and trends always seem to last longer than seems possible. On the other hand we can't ignore the danger in a market that is as extended and as overbought as this one.
We could just set some tight stops and hope that the market doesn't suddenly gap down big one morning and trade through those levels. The other alternative is to lock in some profits into strength. I find that partial sells in conjunction with tight mental stops and some index hedges helps me protect profits when the market starts to become very extended.
We have a very tricky day in front of us. The long weekend is beckoning, which is going to thin out trading and spark some positioning. Will the bulls lock in profits or will they use the thin trading to press even harder?
We have a slightly positive open on the way. Asian markets were higher overnight while Europe is lower. Oil and gold are up slightly. April personal income and spending numbers don't seem to be generating much of a response so far.
Gapping up on strong earnings/guidance: TIVO +12%, PRLS +17%, CMOS +8.5%, CHS +6.7%, WTSLA +6.5%, IIJI +12% .... Other News: ABRX +8.4% (continues recent volatility), ZICA +6.8% (CEO resigns), ONNN +5% (FBR upgrade), VC +4.6% (Tier-1 upgrade), BLDP +4.3%, KRB +4%, LSI +4% (Tier-1 upgrade), X +3.3%, PLAY +3% (qtr tracking toward the mid- to upper end of guidance - TWP).... Under $3: AATK +8.6%, ALTI +4.6%.
Gapping Down
Gapping Down on disappointing earnings/guidance: DITC -36% (also multiple downgrades), TECD -6.4%.... Other News: DRL -14% (is in default of its reporting obligations under two bond indentures; also expects $600 mln write down; also Wachovia downgrade), NGEN -4.5% (profit taking after recent run-up), ZGEN -3%.... Under $3: DANKY -15% (guides for Q4).
Mehed päästke veel mis päästa annab! Mul onjuba 70% portfelist külm. Vaadake mis Tallinna börsil toimub kõigil hinnad 1eur`i. Ma kohe ütlesin, et ärge mängige nende aktsiatega!
jah, aga mul läksid virtuaalportfellis nüüd ostuorderid ühe euriga käiku:( VNU1T siis esmaspäeval rämedalt plussis ;) Mul oli viisnurgale juba varasemast ajast tühistamiseni order peal, nüüd on see realiseerunud...
Ja ongi käes- VNU on jubedas plussis:( mis nüüd teha? see pole ju tegelik olukord... ja mul oli viisnurga ostuorder suhteliselt ammusest ajast, 1.50-le see oli üldse naljakas olukord- panin orderi üles, aga hind langes kõigest 1.51 ni, ja kimas siis üles, jäin ühe sendi pärast ilma... nüüd sain muidugi 1.00-ga;)
