"A man is not finished when he is defeated. He is finished when he quits."

Wednesday, January 13, 2010

January 13th - Early trade



Before I started my workday, I thought I'd take a chance on a paper-trade scalp in ILMN. I saw the tightening consolidation at 9:40 & 9:45 am after a big run-up from yesterday. At the time of the trade, I noticed that the SPY was rising and ILMN wasn't rising with it... so I took a trade short considering that when the SPY slipped down that ILMN would move down in a stronger fashion. It did and I covered for a small gain. The little drop in ILMN continued into the next candle before a nice burst back up shortly afterward. Lots of price volatility makes this possible. There's no way I'd be able to scalp $129 from this move on an "average mover" stock.

As I write this, the clear winning trade was buying the "burst" up that I mentioned above. It has been about 12-13 minutes since I covered my short and the price has climbed as high as $1.12 per share from my cover price of $39.37! The screen shot above is later than the orginal I took of my trade so to exhibit the "pop" I've mentioned.

As an aside, the price moved down toward the 7-EMA during and touched in the next candle just after my trade, before that burst upward... the 7 EMA continues to be a moving average corresponding to support/resistance. This EMA profile I use is recommended by Robert Deel in his book and is present on Scott Farnham's charts at FNG, though by his own admission does not really use them in his trade decisions.

I am likely done for the day with this one trade. I have much day-job to perform and am late getting to it because of my market attention so far.

A good trading day to you all.

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