I don’t know about you, but I have found very few interesting opportunities the last two days. It could be because I am so sleepy (my sleep schedule is all messed up again) (again). I think all my paintbar indicators are keeping me out of trouble, because they don’t get sleepy like I do! When I’m tired, I know I shouldn’t even think about a trade unless my indicators have perked up about something.
So, here’s my one and only trade today. I had mostly decided to take the day off, since the indices are still so range-bound. But, Digital River Inc (Nasdaq: DRIV) gave me several good reasons to make a short trade. Let’s look at the chart:
A number of things were stacked in this trade’s favor:
- It was doing about 1.5x normal volume
- It had just made a new 30-day low, and didn’t immediately pop back up (it was one of my 30-Day Low Watchlist stocks for today)
- It had just entered a volatility expansion phase (see the blue-grey “consolidation” paintbars at the bottom turning red)
- It set up a dummy-style entry (see blue arrow paintbar)
- Round number 49.50 sat between my entry and my stop-loss point
With all that piled, up, and only a very lackluster range-bound market to hold me back, I got in short. After which, a wave of buying programs swept in, pushing the TICKs way up. I was almost ready to hop back out, but the TRINs weren’t budging, and the stock wasn’t breaking above round number 49.50. Sure enough, once the buying stopped, the sellers stepped in to drive DRIV back down. So down DRIV was driven, when big bad bids started showing up at 49.14. This was about 1.5 R on a crappy day, so I decided to take it.
I blame my sleepiness for the fact that I didn’t notice the spread was 7 cents wide when I sent my market order (maybe I need a paintbar for that!). I bet, had I used a limit order, I could have split the spread instead of eating it. Oh well. On the other hand, sometimes it just invites more bidders to one-up me, and I end up having to change to a market order anyway.
Oh yeah, and…
I was too sleepy to write about it, but I had a fairly quick 1R loss yesterday on PTEN (you can see the chart on stocktickr, which saves charts of all my trades, whether I am alert enough to blog about them or not). It was pretty uninteresting… I thought it would go higher… I took a low-risk entry… I was up about 0.8 R before it turned around and stopped me out. I think it fell most of the day after that, too.
So, up 1.35R today, down 1R yesterday… meaning I’m only slightly up for the week. I think it’s going to be like this (up a little, down a little) until the markets break out of their ranges. DIA had nearly an inside day today, as of 3:44PM EST. Unacceptable!
| Stocks Mentioned In This Article | |
|---|---|
| Stock | Links |
| DRIV |  |  |  |