Be Cautious When Market Changes Characters!

“Never be afraid of the normal movement, but be very fearful of abnormal movements, it is similar to a major change in personality” – Jesse Livermore

Despite closing near the high of day after a big day of sell off, the S&P index has traded in the narrow range of 25 points from 1490-1515 in past ten sessions. Lately it has been vacillating within a broader range since the Dow has hit the psychologically level of 14,000. SPY closed at 151.05, 0.43 off the session high of 151.48.

The gyration moves have changed traders’ stance toward market on daily basis;  random price action on individual stocks with big gaps continues. It has become a market of “Buy Dip, Sell Rip”. But how long will market rally last ?

Many stocks look fatigue and are well off from their recent highs after their earning reports, seen in IBM, WHR, LVS, AMZN, GOOG, MA, FB, etc.

When many stocks are becoming wild puppies and market behavior is becoming bipolar, it’s time to get defensive and cautious. Trade wisely with caution!

Here is my SPY daily chart with notes:Chart of SPY daily chart with notes 2-5-2013


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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4 Responses to Be Cautious When Market Changes Characters!

  1. Thx Angela. Excellent blog this week. Wise words indeed. BTW do you think “Buy Dip – Sell Rip” would make a popular tattoo? Just wondering, LOL.

  2. drno says:

    Any comments on the continuing meltup in the markets.So similar to recent runups. shallow pullbacks. sector rotation , Fed induced buying etc etc.

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