Mid Day Trading Update – The Overbought Dilemma
Even to make the statement that we are overbought to begin with is quite bold when you think about it. I mean we could continue rallying slowly up to SPY $170 or even higher without any kind of significant pullback. However, when stocks get a little bit ahead of themselves, the chop action is never too far away. We've flattened out close to all time highs today, with the SPY unable to reach the highs from yesterday's trading session but managing to hold $166. We're seeing a mixed bag across sectors today with Apple (NASDAQ: AAPL) taking the lead for the tech names and Google (NASDAQ: GOOG) & Netflix (NASDAQ: NFLX) putting in small pullbacks.
The second you think the market is a long, she sells on you and the second you think she's a short she rips on you. That's the kind of environment we're looking at today and it is best for you newbie traders to understand when to trade and when NOT to trading. Learning when NOT to trade is actually the most valuable skill of a professional trader.
Financials are holding up very well despite some names sitting in the red today and if that trend continues it will be a while before the indexes make that 200 point DOW drop. Silver & Gold managed to retrace back into positive territory, earnings themselves yet another stay of execution.
I've spent most of the day writing calls on Google and it's worked out well as the volatility from the morning has caved in and pushed premiums down considerably.
Stay tuned for more updates!
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