Friday, March 9, 2012

Update: The good, the bad, and the ugly

The Good:  My order to short BA got filled and then stock fell pretty nice.  I'll watch this for a continuation move.

The Bad:  After initially making a strong move in my favor,  SLV continued its bounce off the channel.  My entry into the position was decent. my expectations for the size of the move probably weren't.  I had nearly  a 10% drop from my initial short.  Anyway,  My position just went red by a bit, but I have over .80 before my stop is hit.   If I'm right that this is a complete breakdown I'll be fine.

The last two days have made me rethink the cascade entry strategy I used.  Had I hit SLV with  a larger number of shares on the initial sale, I would already have closed out portion of the position for profits.  Instead, I continued to add to my position as it went it my favor making me susceptible to going red on a bounce, which happened.  

 My view off the trade has not changed, however.  The move to 36.44 was weak.  On the weekly is shows up as a kangaroo tail top.   Impulse is blue on both weekly and daily.  

The Ugly:  Ree moved up 20.35% because MCP bought out a rare earth processor, which caused speculation that REE would be the next buyout.     I'm not buying.  It's big move off a signal that hadn't suggested a bottom.   My inclination is that this will fade.  I shorted another 50 shares at 5.99.   a 79% entry grade.   However, this was a reactionary trade, which means I probably should not have entered it today.  it is possible that this trades upwards if MCP does and I probably could get a better entry by waiting.    Maybe 6.50 from the chart.  It will be interesting to see if the bearish MACD divergence continues, which showed a clear top in the beginning of February.

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