Much of the energy MLP space enjoyed a strong bounce on Wednesday, but I took advantage of the strength to sell my position in the JPMorgan Alerian MLP Index ETN (AMJ). As discussed in past editions of Trader's Notebook, this was always intended to be a short-term trade, and while the chart looks like it may have further to run, I opted to play it safe and exit my position into the two-day bounce.
For those clinging on to Kinder Morgan's (KMI) every tick, I would remind you the chart is still broken. Trading in this stock, which has been very good for volatility-seeking scalpers, should be reserved for short-term traders only. Higher timeframe participants would be wise to put away their fundamental analysis and recognize much healing, in regards to price action, will need to take place before KMI is worthy of anything more than a scalp.
A number of readers emailed regarding Freeport-McMoRan (FCX), but rather than stalk a stock incapable of finding a bottom and with no real catalyst in the foreseeable future, why not spend a bit more time watching Alcoa (AA)? While AA's chart is still nothing to write home about, I believe it has a far better shot than FCX at morphing into a bullish, higher timeframe trend. The bottom line is I would avoid FCX and instead stalk AA above $9.50.
Any trading or volume profile related questions can be posted in the comments section below, emailed to me at parkcityyeti@gmail.com or posted to my twitter feed @ByrneRWS.
