| ShadowTraderPro Swing Trader for December 18, 2009
The ShadowTraderPro Swing Trader is your every
morning dose of market reality brought to you from the resident geniuses
at ShadowTrader. Overseen by Chief Equity Strategist, Peter Reznicek, each
issue contains a full report on the prior day's action, including market
internals, technicals, and what sectors were hot and cold. Each issue also
includes the ShadowTraderPro Model Portfolio, which updates members on
what stock plays STPro is currently engaged in officially, as well as
provide a daily list of long and short setups for more self-directed
traders and investors. To get the most out of your subscription, please read our Swing Trader User's Guide If you have any questions or comments regarding commentary or plays in this newsletter, please email to swingtrader@shadowtrader.net. The Big PictureGood morning, traders. There is an old saying amongst those who enjoy Bass fishing. If you don't pull in weeds on some casts, then you aren't fishing for Bass. In many respects, the same could be said for swing trading. We cast our line toward set ups that we know work much of the time, but inevitably some trades will not go as planned and we will pull in a clump of weeds. The larger premarket gaps that seem to be happening on a daily basis makes it feel like we are fishing for Bass not in a lake, but in a weed laden swamp. However, this does not change the fact that at the end of the day, our trading results are the product of our own decision making. So what are the things we can do to help ourselves if we choose to continue to fish in the weedy swamp instead of waiting for the Bass to move to a more fishing friendly lake? First, we must continue to cast our line toward carefully selected trades. Nightly scans are always very important, but they are especially important in conditions such as these where thorough investigation of set ups is key. But as thorough as one might be in researching a chart set up, it might not be enough to avoid getting snagged. So instead of beating our heads against the side of the boat, the second thing we can do to avoid excessive damage to our trading capital is to reduce our position size until conditions become more favorable. We have received a few emails asking when we think this chop will end. Our answer is...it will end when it ends, which leads us to the third thing we can do until the chop ends. Lock in gains when you have them instead of hoping for some kind of trend to take the stock higher. With gaps happening every other night, profits are valuable, so adjust by tightening stops on profitable trades and allowing yourself to take profits earlier than you would otherwise. We have three trade ideas listed in today's Bulls and Bears section and have illustrated one of them on the chart below.  Above is a daily chart of Celgene Corporation (CELG). The stock is approaching the bottom of the range in which it has been trading for several months. We have highlighted the entry price range in yellow and are looking for CELG to repeat the pattern of moving back higher off the previous lows. The ShadowTraderPro Model Portfolio's long position in gold (GLD) was hit hard yesterday with higher volume selling pressure throughout the day. Price is now around the 61.8% Fibonacci level that was our original entry price. With our stop just below it at 106.00, it does not make a lot of sense for us to exit the trade now. As for the broader market, we aren't ready to call a bias one way or the other. We did think it was worth mentioning though that many of the stocks on our list that had touched the face of their respective ascending trendlines did in fact break those ascending trendlines yesterday. This is a bearish sign, but we will need more than this to move our bias from neutral to the bearish camp. Under The Hood
Heads UpToday - 12/18/2009 Monday - 12/21/2009 Tuesday - 12/22/2009 Bulls and BearsLong Ideas
ShadowTrader Model PortfolioTo get the most out of your subscription and for detailed instructions on how to structure your own portfolio, read our Swing Trader User's Guide
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