How I proceed on a day like today...
First, I acknowledge the obvious:
• That recent market action is a resumption of the decline that began 11 May.
• That the charts look sh**ty. (Does anyone NOT know what that word is? Why the need for placeholders to mask it?)
Then I look at favored opportunities:
• Those that breach identified support are cast aside.
• Those that have yet to breach support, I zoom in on.
Specifically, I monitor the intra-day charts in the quest for reversals. These reversals manifest as a comination of factors:
• A specific pattern for the price bars;
• A specific price:volume relationship;
• A specific relationship of the price bars and the moving averages. (NB the periodicity of your movings averages, as they will carry into the intra-day chart their default settings).
Who, in his or her right mind, would buy such market action? And who would do so in the face of such ugly geo-political news? And who would do so in front of a weekend, allowing the opportunity to absorb the potential 70 hours of bad news before redistributing any shocks to their portfolios come Monday AM? ("SELL!")
Professional investors is who. They -- we -- are paid explicity to assume risk. Not [to] avoid it. There is only one deterministic item in this entire shebang: Whether you will do the right thing, the hard thing, when conditions change. Professional investors neither "predict" nor even "expect"; they do, however, anticipate. Given any set of circumstances, a stock (or the tradable you prefer) either abides by the rules of its setup, or it is gone. Poof! Next...!
So Rackable Systems/RACK has declined to its 200 day sma. This moment, then, tells its immediate future; it either holds... or fails to hold. Buying at $32.75 with a closing stop 75¢ lower is my notion of a good risk:reward ratio. Of course, I could wait to be certain, but certainty assesses its own costs:
Less certainty = less risk + increased reward
More certainty = more risk + decreased reward.
Hmm, I wonder which option I would (should) select...? (Of course, I am a trifle distracted today, of all days.)
-- David M Gordon / The Deipnosophist
• That recent market action is a resumption of the decline that began 11 May.
• That the charts look sh**ty. (Does anyone NOT know what that word is? Why the need for placeholders to mask it?)
Then I look at favored opportunities:
• Those that breach identified support are cast aside.
• Those that have yet to breach support, I zoom in on.
Specifically, I monitor the intra-day charts in the quest for reversals. These reversals manifest as a comination of factors:
• A specific pattern for the price bars;
• A specific price:volume relationship;
• A specific relationship of the price bars and the moving averages. (NB the periodicity of your movings averages, as they will carry into the intra-day chart their default settings).
Who, in his or her right mind, would buy such market action? And who would do so in the face of such ugly geo-political news? And who would do so in front of a weekend, allowing the opportunity to absorb the potential 70 hours of bad news before redistributing any shocks to their portfolios come Monday AM? ("SELL!")
Professional investors is who. They -- we -- are paid explicity to assume risk. Not [to] avoid it. There is only one deterministic item in this entire shebang: Whether you will do the right thing, the hard thing, when conditions change. Professional investors neither "predict" nor even "expect"; they do, however, anticipate. Given any set of circumstances, a stock (or the tradable you prefer) either abides by the rules of its setup, or it is gone. Poof! Next...!
So Rackable Systems/RACK has declined to its 200 day sma. This moment, then, tells its immediate future; it either holds... or fails to hold. Buying at $32.75 with a closing stop 75¢ lower is my notion of a good risk:reward ratio. Of course, I could wait to be certain, but certainty assesses its own costs:
Less certainty = less risk + increased reward
More certainty = more risk + decreased reward.
Hmm, I wonder which option I would (should) select...? (Of course, I am a trifle distracted today, of all days.)
-- David M Gordon / The Deipnosophist
posted by David M Gordon | 10:30 AM
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