markets keep being determined to a large extend by the sell-off in tech stocks. This morning the market opened sharply higher, then followed Facebook down the drain to bounce together again. Give the fact that Facebook is a major component of the SP&500, it obviously makes sense that the recent tech panic has influenced the indecees too.
Luckily, small-cap land keeps on offering both longs and shorts which I will elaborate on now – as always with a pinch of hindsight bias.
This morning TOPS gapped up big time due to a 10/1 reverse split. Despite the existence of the efficient market hypothesis, splits often lure momentum buyers into specific sectors and thereby bring volatility. Similarly, TOPS had a very nice red to green move this morning. From the this level at $2 it spiked to $2.5 in a matter of two minutes
ENRJ, which had shown remarkable strength last week just to finally crash, on the other hand presented a very nice bounce play opportunity.
Now, let us have a look a the new section “WHY AM I NOT IN THIS TRADE?”
Do you remember how I got stopped out of FUSZ last week in the mid 60s? Well, look at where it trades now. Just under $2.
Even though I had had VATE on my watchlist for a possible breakout, I judged there to be too little liquidity. Well, the breakout worked perfectly and liquidity would have been enough for my capital.
Similarly, due to some stupid reason I did not approve of the RHHNF chart when it was on my watchlist for the breakout at 40 cents last Thursday. Since then it almost has doubled.
And then there is UCLE, which should have been on my watchlist last week but unfortunately was not. Well, it broke out very nicely too.
The one breakout which I ended up trading, and luckily taking some profits on, did not fare so well.
Well, given this bunch of great breakout charts I really cannot blame the market conditions for my current lack of profits. Rather, I will have to analyze how my decision making misled me. After all there is something to learn from this.