Momentum Trader Report: 09/03/09

03 Sep

Posted by Momentum-Trader as Momentum-Trader Report

The S&P 500 ended a 4 day losing streak with the help of late-in-the-day rally to close it +.85% on lower volume.

There wasn’t much action in stocks, except for gold stocks which continued to move. This helped two stocks from the watchlist. One of them was CDE, which triggered early and ran well all day. I planned to day trade this, but am still holding some, because it performed so well.

The other was PAAS, but I didnt take this one, as it gapped up in the morning. It also looks strong.

I also had a late afternoon trigger in CLS. I took this one using a slightly smaller position size, and because it didn’t move much, I am still holding this as well. Please don’t gap down.

I had a very early trigger in AUDC, a speculative stock, and it was a loser for me. It looked good at first, but reversed to stop me out. I think I’m done with these speculative plays. There are better stocks to watch and trade.

Gold and especially silver are on amazing runs. I wouldn’t be surprised to see these go parabolic. Gold is almost at 1000, and should attract some more attention then.

With gold rising, I would think the dollar would be falling, but it’s not. In fact, it has been holding up well. This chart of the UUP, the dollar ETF, is showing tight consolidation here, the kind seen before a big move. It’s trading within a falling wedge pattern, and will break out soon.

UUP is also setting up a squeeze play, described here. These often precede momentum moves, and by the current direction of the momentum oscillator, it could trigger a long signal. I know, seems unlikely, but this is what the chart is showing now. That could change quickly of course. I’m not taking a position, but watching this one closely.

Click to enlarge

However, if UUP breaks down instead of up, that should be good for stocks, and would offer a nice opportunity in UDN.

Trade Ideas for 09/04/09:

Tomorrow will certainly be a low volume day, and probably a frustrating one to trade. I plan to watch the open, and if any of these stocks show unusual behavior. If not, I’m going to log off early. Tomorrow probably won’t be worth trading, but you never know.