I initiated a few shorts on the morning bounce (DRYS, LEH). I bought KGC, a gold stock for which I had a buy stop in place on breakout of $21.
Four of the six people I’ve had private chats with have said they are having trouble gaming this market. My first question has always been “why?” The answer seems that many either have trouble shorting breakdowns, or cannot get out of the “buy the dip” mode. While buying dips has worked, one must recognize market sentiment and accumulation/distribution patterns. Another key point is sector strength. I hope to discuss this more in the coming days, possibly via video webcast.
I’ve narrowed the number of blogs I read, but The Kirk Report still tops my list. He has a good post on using tight stops. Personally, a well placed stop saved my from taking a big loss on my BIDU trade.