How To Trade This Market Around The GDP Numbers

Posted on August 27, 2010 by trader21 in GLOBAL CHART ANALYSIS, Trading Plan

A day of early profits took a turn for the worse once the market sold off the early morning move higher. We expected to get at least a full day or 2 of movement higher and this quick selling may be tell us that more selling may be on the way.
The GDP numbers are set to come out early Friday and the reaction to the expected bad news will make or break this recent batch of trades. We typically like to have at least a couple percentage points of profit cushion ahead of such important economic news but whatever the market gives us is what the market gives us.

NEW SETUPS
No new setups since we are teetering on the edge of support and our latest rally attempt has failed thus far.

OPEN POSITIONS
We are keeping stops in place. We are in some of the strongest stocks in the market which should get a big boost when the market finally rallies higher but over the short term, moves lower may be larger than what we are willing to take. We mentioned with Thursdays setups that they are high risk right now and that’s what they remain.

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BUY RULES
*We look to buy our setups when they break at least 10 cents above the prior days high. This gives us confirmation that the setup should continue higher and increases the odds of an explosive move. Depending on market conditions we will look to start taking profits on ½ position when we get a move of 3%-5%. We then move our stop to breakeven for the remaining position and let it run in hopes of massive gains.

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