Good Follow-Through

 | Nov 19, 2012 | 10:45 AM EST  | Comments
  • Comment
  • Print Print
  • Print
Stock quotes in this article:

aapl

,

SSO

,

bgfv

We have very nice follow-through to Friday's strong action. This action is a good example of how you don't need to buy into the teeth of a decline to catch a good trade. There was plenty of time Friday to take positions after the positive news. The anticipatory bulls, who have been buying all the way down, are now back to where they were last Wednesday morning and are probably happy to be cutting losses.

The question is whether this bounce can be built in. There isn't much choice but to take profits if you came into the day with longs, but these bounce can often last longer than you expect as underinvested bulls try to find buys and the bears are squeezed. Usually we don't see a gap like this immediately reverse. There will be quick flips and then another try higher when those left out try to jump in.

I've been a net seller this morning and sold down Apple (AAPL), ProShares Ultra S&P 500 (SSO) and a number of other positions. If it continues to hold up, I'll start inching in to a few other things that have good charts like Big Five Sporting Goods (BGFV), but I'd rather lock in gains and then buy higher if it looks like we will see sustained momentum.

Columnist Conversations

The Fed works for the government. The Federal government owes over $16 trillion. The Fed will likley never rai...
The key to analyzing the Treasury market is to look for the opposite of what makes logical/fundamental sense. ...
Shares of Altria Group are bumping up against last years peak this morning. This area, just above $38.50...
The Census Bureau is altering the way it calculates the number of people with health insurance. This will obsc...

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.