Be Patient and Look for an Edge

 | Nov 14, 2012 | 10:48 AM EST  | Comments
  • Comment
  • Print Print
  • Print

The pattern of a mildly positive open and a quick selloff continues. Typically, support turns back up at midday but the close is poor, which keeps the mood negative. As long as early strength is faded and the market closes weak, we must give the benefit of the doubt to the bears.

The bounce buyers are still trying to catch a turn but they have been burned again. The best thing that could happen is that they give up and turn bearish. While the market action has been ugly lately, it's lacked extreme emotion and there have been few signs of panic. Panic may not produce a bottom, but it helps move the market to a lasting low much faster.

Downtrends are always trickier to trade than uptrends, but this one has been worse than usual because it has been a slow drip lower without any major drama. The intraday movement is practically random, and the dip buyers have been consistently disappointed when the market doesn't close well.

Once again, I have very little going on. I'm doing minor day trading but mostly staying patient while looking for a better edge. Trying to call a bottom in this market isn't the way to go, so I'm doing my best to avoid thinking that way. I'll look to buy strength, if we ever see any, rather than weakness.

Columnist Conversations

Keep an eye on Wayfair, which recently filed for its IPO. Killing it on pricing in home goods head/head with W...
Is this the biotech revolution or the biotech bust? View Small Cap Biotechs Like Never Before: Transparency is...
HLF is trading $51.05, up 3.2% with IV30™ ripping up 21.5%. The Symbol Summary is included below. Concl...
With just less than an hour til the close of trading the S&P 500 is trading nearly 4 points off of that 2,...

BEST IDEAS

REAL MONEY'S BEST IDEAS

Columnist Tweets

BROKERAGE PARTNERS

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.


TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.