While the "MARKET" looked just fine to the home-gamers since the Dow was up and the SP500 was pretty much flat, some of the technology leaders lost weeks worth of gains in a few hours.
Facebook wiped out a months worth of gains yesterday, so did $LCRX, $SMH, $NVDA and many others. It was a big rotation from Tech to Finance.
It was ugly across the board for tech names, but these one-day sell-offs this year have been exactly that, one-day sell-offs. The Bears have not been able to produce any type of downside follow through this year. Maybe this time it will be different, perhaps it won't.
Back to the daily process;
On a daily basis, I go through 500-1000 charts, I run 4 different scans and then look at the top 200-500 stocks with the highest momentum. All this takes me about 30 minutes, I know exactly what I'm looking for.
I narrow down the universe of stocks to a handful of names sometimes a little more, then the market will narrow down the list further by getting me in or keeping me out of the names that make my list. If the stock does not go through the previous day's high, then I don't get involved (99% of the time). Yesterday I had 7-names on my list only two when through yesterday's high. This is what works for me, I look at charts a little different, and I believe certain things that you may not believe or agree with.
"How you trade is shaped by your beliefs. You do not trade the markets. Instead, you trade your beliefs about the market." Van K. Tharp.
STEPS ALL BEFORE THE MARKET OPENS.
- SCAN.
- PUT NAMES ON A WATCHLIST.
- SET ALERTS ON YOUR SOFTWARE.
- FIGURE OUT WHERE YOUR STOP LOSS WILL BE FOR EVERY NAME.
- FIGURE OUT HOW MANY SHARES YOU ARE GOING TO BUY, RISK, ETC.
- YOU CAN ENTER THE ORDERS MANUALLY AS THEY TRIGGER OR YOU CAN PLACE YOUR BUY STOP ORDERS PRE-MARKET MAYBE WITH A STARTING TIME LIKE 9:45.
- THE ABOVE ARE THE ONLY THINGS YOU CAN CONTROL FOR THE MOST PART.
- ONCE YOUR BUY STOP IS HIT, THE MARKET IS GOING TO DO WHAT It's GOING TO DO REGARDLESS OF HOW MUCH YOU WATCH OR CHEER.
- RINSE AND REPEAT.
Here's my watchlist; I only have an interest in getting involved IF AND ONLY IF they can get through yesterday's high plus .10cents.
Frank Zorrilla, Registered Advisor In New York. If you need a second opinion, suggestions, and or feedback in regards to the market feel free to reach me at fzorrilla@zorcapital.com or 646-480-7463.
