Wednesday, June 23, 2010

Draw Your Line In The Sand - Place Stops To Protect Profits or From Losses

The market has provided us with the perfect line in the sand today.  Considering the intra-day volatility I would use today's lows as a great place to stop out positions.  If this is a tradeable rally, we should be able to hold these lows.  If not, the rally could be dead in the water.  We undercut the follow through day lows on all the indexes, except the DOW which missed by about 30 points, and that statistically leads to failed rally attempts the majority of the time.  They don't always fail immediately or fail all the time, but you need to proceed with caution here, or risk significant losses.
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