Wednesday, May 26, 2010

05.26.10 - Positive Internals

Price is struggling under its declining VWAP, where it has been likewise bound to the upside by its falling 5-day moving average. However, internals are strongly positive so there is still good hope for a higher close.

[Excellent: European Economies in Graphics]


Ben said...

Does every new day open have the potential of a new trend, or do you look at the longer term trend do decide which entry to take


jgpietsch said...

Typically I look at each day's internals to decide whether or not to hedge my core positions, which are typically constructed of combination of value stock swing trades, and longer term Relative Strength securities. Trading on different time frames is a fractal way of both finding opportunities in alignment with the longer-term trend, while managing risk, and occasionally taking directional bets in the short-term.

jgpietsch said...

Here is an example, lets say the market is in a strong down cycle. On a large reversion to overbought status, I might short individual issues that I think have better than even odds of a strong reversion back down in alignment with the macro structure. If I'm wrong intraday (but still think the trade will come way may presently), I have the ability to hedge those positions without dumping the entire portfolio.