From the Trading Desk

Weekend Update: V-Shaped Dead-Cat Bounce

That elusive strong close just kept getting further and further away with each attempted dead-cat bounce this week. I must say that for a low overall volume bounce, my positions have held up beyond extremely well with zero stops triggering intraday on Friday and only one stock triggering an EOD sell signal on Friday. There have only been three stocks to trigger stops in the past three sessions. Considering how many positions I am currently holding and how weak the overall bounce has been this past week this is about as good as it can possibly get.

Along with this development, new long positions have continued to trigger with the vast majority “working” and not hitting any trailing stops. FRAN is the first name all week long and there were 10 new positions initiated. Will they all continue to work? I don’t know. That is why I have trailing stops that work higher to ensure that I at least lock in some gains and at the least minimize losses to their smallest possible outcome if all hell does break loose. Baring an absolute violent reversal next week, I should be good on all of the new positions no matter what the market does.

There continues to be a tad too much bullishness out there but it was good to see the bulls come down below 50% in the Investors Intelligence survey while the bears overtook the bulls in the AAII survey. Still, I monitor social media and a few daytrading chat rooms and the unseasoned bravado of some of these young and reckless traders indicates to me that when the uptrend does come to an end a lot of people are not going to be able to reverse their bullish bias. When my long positions stop moving higher, guess who will be locking in profits and moving on without emotion? If you guessed me, great job!

Alright. I am still not stoked on our reversal attempt from the 3/21 market wide sell off. The bounce is v-shaped and the volume is lame. However, my long positions are still doing very well (beyond very well) and new long positions continue to trigger. I will continue to take my cue from individual stocks until the overall market starts to impact them then I will take my market concerns and put them into action to ensure I lock in profits on my winning positions, cut my losses short on the few losers, and have some hedges in place to take advantage of any market pullback. Have a great rest of your weekend. I’ll see you back here Monday evening. Trade intelligent. Aloha.

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