Fluidity

This 'chop' (non-directional direction) the markets have had to endure since turning the calendar page to 2005 creates opportunity for the experienced investor.

For example, I mentioned yesterday morning before the markets opened that they likely would rally strongly off the intra-day lows. (That is precisely what occurred.) Having that vision, the onus then was upon me to develop a strategy that could profit from such a scenario. That strategy was to seek positive divergences -- stocks whose intra-day lows yesterday were higher than in previous days and weeks. This led me to purchase (when at their intra-day lows) several stocks, including:
Apple/AAPL -- (a breakout above $40 signals an end to this base),
Amedisys/AMED -- (more anon re this opportunity),
Abercrombie & Fitch/ANF -- (continues to set new all time highs),
Coach/COH -- (see comments re ANF)
Dominos' Pizza/DPZ -- (such a sweet setup!),
Kyphon/KYPH -- (more anon),
PF Changs/PFCB -- (discussed previously)
Toll Brothers/TOL -- (some homebuilders notched new all time highs yesterday; fortunately I bought Tol, and others, at the day's lows),
Whole Foods/WFMI -- (purchased the breakout Wednesday. What a long term winner!)

Here's the rub: now that everyone quickly forgets the terror of yesterday and again is bullish, this small intra-day rally could run out of steam sometime today or soon thereafter as it hits a ceiling of resistance above yesterday's close. Assuming this particular vision too is correct, then I will watch for negative divergences as indications to take profits.

The need for fluidity is one criteria of successful investing. (Being drop dead gorgeous is another, wouldn't you know! ;-)

Fluidity in motion