Bipolar Market Provides Great Trading Opportunities

Price is the only that matters. Adapt to it, don’t fight it. Before entering a trade, know exactly where to exit for a gain or loss.”

The U.S. market opened up this morning despite yesterday’s bearish close, and then it was sold off all the way until 3 pm when AAPL started bouncing hard after hitting its 50-day sma line near 650 which is the downside target I mentioned in my Sunday post, and the market went back with it. The S&P eked out with 1.1% at 1,445.75, and the Nasdaq rose 6.51 points, all on lower volume.

The bipolar like behavior of market has constantly made unpredictable moves, such as gapping up or down after the opposite closing in the previous day. Rotation keeps going on. The divergent price performances in leaders are growing apart seen in AAPL and GOOG. The wild price action on CMG was ferocious, triggered by the news that hedge fund manager David Einhorn recommended selling the stock short during a presentation, also aided by HFT.

Honestly this type of crazy action has made many traders like us more prone to becoming VERY-short-term swing traders or daytraders. I posted a QCOR daily chart before, too to demonstrate how it was hammered from year high to year low in just a few days!

During this trendless market with wild swings, to me, it’s important to find only a few stocks I’m familiar with to trade, The bigger swing, the better! Also, it doesn’t hurt to take profit since tomorrow is another day.

Here is my comment made before the market open: Exact 100 points difference between $AAPL at 665 & $GOOG at 765. Which one to buy or short? Bipolar action almost makes us day traders for now.”

What I meant was since AAPL was nearly oversold short-term approaching to its 50-day line where is usually a support area, chasing to short is risky, so I’d rather buy it near 650 for bounce play; conversely, GOOG was over extended on a powerful chart, shorting near its year high could be more rewarding. On GOOG‘s daily chart, there is a bear pennant built since last Tuesday’s bearish shooting star candle bar occurred on high volume. Today’s reversal from new high is another warning.

Today I followed my thinking described above and my trading plan, and all worked out well on AAPL and GOOG trades. Here is one of examples how I traded on my GOOG intraday chart with notes:

Thank for viewing! Trade safe and well!

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About Angela Zhou @z8angela on Twitter

I am a full-time swing/day trader trading stocks & options. I got into stock trading/investing since the internet bubble in 1998. I am optimistic in life and objective in trading. The purpose of this blog site is for me to share my trading experience and market view with others. I may write something about life experience and living, too. My motto is: A Great Mind Becomes a Great Fortune. I love people and life, and I appreciate beauty in everything. Thank you for viewing!
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5 Responses to Bipolar Market Provides Great Trading Opportunities

  1. Vesna says:

    Angie, you are the best!

  2. ricardo says:

    Great input and chart thanks for sharing

  3. fred131 says:

    Thanks, without hindsight you can judge and execute quickly is something I must learn from you.
    I guess you also set trailing loss at 10%-20 % when you enter the trade..You mentioned 650 is the intraday low for AAPL, guess you also caught that one ..

  4. Ryan says:

    Thanks for posting intraday charts helps to see your thought process. Is it possible to talk more about your sizing on each entry/exit. Are you all in all out, or do you do partials?

  5. Thanks to you, Angela, I changed my attitude and opinion on the day trading. I trade stocks, futures and Forex. I am a position and swing trader, however, thanks to you, I try trading on intraday basis as a day trader and I must say that I make money, as well. Patterns work on 5-minute charts on stocks, futures like e-minis or currencies.

    I love your wisdom in patterns! You should write a book about them and your trading style, I would buy your book even if you sold it for any price!

    I apologize to you that I dared doubt about the day trading.

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