Today’s strong reversal of yesterday’s reversal put the Dow and NASDAQ officially in bear market territory. The market started out strong, sucking in the new buyers, and then taking them to the cleaners. I had some stocks trigger from the Watchlist, and they did not fare well.

ARD was a stock I expected to run, and it looked good early on, offering an opportunity for a nice day trade, but it couldn’t withstand the downward pressure and it closed down nearly -7%.

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Although I lost a good amount of money today, I take comfort in knowing that it could have been worse if I hadn’t used stops. I keep my initial stops relatively tight, and then trail them if the stock takes off. Believe it or not, there are some traders who don’t use stops. I couldn’t imagine trading without them. Sure, sometimes you get stopped out of a winning trade, but in days like this, they save your account from getting annihilated. For example, I was stopped out of ICO yesterday for a small loss, and was a bit disappointed, since I got stopped out near the low of the day. Take a look at what happened to it today.

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Trade Ideas for 07/03/08:

The market should bounce soon, but I don’t plan to trade tomorrow due to a half a day of trading, but may try a quick scalp if conditions are right. However, this chart does look interesting.

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Good luck and good trading!