June 07, 2006
If I were a trader...
I sense another good opportunity brewing.
Here is my gameplan for tomorrow:
I will be watching the open closely.
Strong open – Kick the dog, Back to Bed (maybe golf – scrap that its too freaking hot). It will likely get sold off.
Weak open - play with the kids and keep an eye open for a big selloff
Overseas crashing and Futures limit down – action…
My main focus is on the OIL stocks and the Index (OIH). With oil still at $70, the stocks act horrible. Something is giving here soon. Either OIL is coming down or these stocks are ready to rally. Maoxian has a great post on why these are his "tell" right now . READ IT if you are trading!
Shorting – Not for me right now – watching Federal Express for some reason. I have been for a while and am amazed at the resilience
Would not touch the semis – they smell rather putrid! That goes for QQQQ and most tech.
Biotechs – NOT
Diamonds (DIA) – Love to see 107 and would take a long trade in the area
Gold – more nibbling, maybe some calls or sell some puts on major weakness
Spiders (SPY) – 122-123 would be an interesting panic entry for a long trade but would probably start buying at 124ish
India – Nibble on IFN (down almost 40 percent)
Japan – I am a buyer tomorrow of EWJ for a trade, maybe a hold.
An interesting post on the Homebuilders today from Bill Cara . I agree in principle; but here is my take (slanted from the booming city of Phoenix):
Everyone is panicked on homebuilders but they are much different companies than the last cycle. They carry much lower inventory risk these days.
If they fall 10-20 percent more I am looking to add MTH. They have a southwest US focus. Steve Hilton, their CEO is a smart operater and tough cookie. They have a very efficient process to building and leveraging and would not bet against him when this turns and it will.
I believe that the US dollar stays WEAK and the Asians and Europeans will be your neighbors before the real estate end is really here.
Don't get me wrong, from a trend perspective, thehomebuilding stocks are cooked, but all the charts look bad in a bad market and I can't help myself when everything looks like crap.
If you can't help yourself - now you know what I am looking at.