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Trading As the Dust Settles


...we now must embrace the action while at the same time balancing prudent risk reward.


Good morning, Minyans,

Yesterday was quite a ride after the FOMC rate cut and post pop, drop and pop again. The technical picture is much improved after yesterday's close, with the NASDAQ looking the best. It is clear that the bulls have control and we now must embrace the action while at the same time balancing prudent risk reward.

I have been discussing many names lately, all of which are working well. Here is a brief update:

  • BlackRock (BLK) broke out to new highs yesterday adding close to 5% or over $9.00. It has been a whippy ride but so far this one has done very well. It is time to raise my stop to yesterday's low but let it ride.

  • Charles Schwab (SCHW) has been meandering about, consolidating right around longer term resistance. This stock needs the market to move and should we see follow through from yesterday's broad based rally, I would expect this name to perk in sympathy. I have just about a full position here but I am waiting for a final break over $23.61 before adding my final piece. I will keep my stop around the $22.50 level here as this one tends to be very whippy.

  • Art's-Way (ARTW), my very thin, speculative name started to find some attention yesterday rising close to $2.00 or over 8%. The move was excellent but I suspect this one has some room to go. This is a very speculative name and it trades extremely thin, so if you are in here keep your position sizing small and leave room for it to wiggle about. I will raise my stop here to yesterday's low of $23.31.

If you are underinvested and looking for some new names as we embark on the final two months of the year, I would strongly encourage you to look at what is working and focus your attention on strength rather than weakness. Names like Dell (DELL), Microsoft (MSFT), or Intel (INTC) are showing excellent relative strength and are not yet as extended as other tech favorites such as Google (GOOG) or Baidu (BIDU). Some of my Dirty Dozen, such as Logitech (LOGI) and AT&T (T), are still technically attractive at these levels with a few others worthy of keeping on watch.

We have some early weakness on our hands and today we will really see what the mood is surrounding yesterday's rate cut. Regardless of which way we go, it is very important to remain open-minded and flexible. If this is the start of another big run, you will want to make sure you are willing to play it but if it is not, we can remain patient and sit it out.

Positions in SCHW, BLK, ARTW, T

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