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Should the market continue to melt higher in a V-shaped manner, I acknowledge that I will not reap the full benefits by not being aggressively long. I have yet to see a plethora of the types of high probability swing trading setups on the long side from which I typically make my biggest profits. I also acknowledge that there are many ways different styles and systems in the market that can be profitable if executed properly. So, you are going to have to decide what style works best for you and to which principles you are most likely to adhere. That said, commingling styles is the easiest way to lose money, such as the infamous gambit of “turning a (losing) trade into a long-term investment.”
Currently, I have a few select longs on, such as NILE inside 12631, with a continued heavy cash position. Because I was in very heavy cash for much of the market’s ride down this summer and early-autumn, I am in no rush to chase stocks anywhere. I am content to wait for proper entry points to present themselves, so long as the market holds above (on a weekly closing basis) that key 1120 zone on the S&P 500.
In the cloud-computing space, looking at much of those technology stocks with exposure to this niche it is obvious that they have endured some serious carnage in 2011. Even compared to other areas of the tech sector, the cloud bloodbath is breathtaking. However, now the daily charts of EMC FFIV NTAP RAX VMW all indicate potentially massive, two-month bases/bottoming formations. Again, I am in no rush to be a hero down here, but they do merit close attention.
In addition, the four charts below of stocks with cloud exposure impress me even more than the aforementioned stocks. I suggest keeping them high up on your watchlist. What you are looking to see, in order to buy these, is a benign broad market pullback or sideways period of consolidation, so that the promising patterns in the charts below remain intact.
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Nice post, I’ve been eying LLNW myself. Also, if you haven’t seen Zack Galifianakis’s “live at the purple onion” stand-up comedy DVD, it’s hilarious.
chess most of these look like bear flags. is there a way too tell the diffrence between consolidation and bear flags? beyond price action?