2-9-2015

The market appears to remain directionless. In this kind of market the traders who are skilled in naked puts are making out well collecting put premiums. I don't consider myself skilled in this kind of trade so I am on the sidelines. I updated the watch lists with the stocks below. GRUB and LNKD could be added to this list. LNKD gapped up on earnings last Friday and represents a buy-able gap up type of buy situation. A buy-able gap up is considered "safe" if you can place a trade when the price is low in the gap-up day trading range. Entering on the day of the gap up or in the following days is okay and the stop is placed just below the lows of the gap-up day. I prefer to use mental stops and give the stock some time to test the lows of the gap-up day and watch for a definitive close below this level before deciding to exit the position.

For me I will follow the breakouts in the market and watch for solid evidence that stocks are showing follow-up buying action after their breakouts. Follow-up buying has been the missing element for many months now. BIIB seems to be showing follow-up buying after its buy-able gap up six trading days ago. ULTA is an example of an aimless sideways move after its 1/23/15 breakout.

I will also be watching to see if stocks on my shorting list are making meaningful moves to the down side. Solar stocks such as CSIQ, TSL, SCTY are moving up toward their 200-day moving averages where in the past they have stalled out and moved lower.

[U]Long List[/U]
ACT
AKRX
AVGO
FRGI
HAR
TYL
UA
UAL
ULTA
VEEV