Home > Lessons from the trading floor > Welcome September…

Welcome September…

Welcome September, welcome back volume, and welcome back intra day trends. August was dismal for most intra day traders, with choppy low volume day. This month started out with a bang, last week we saw three very different type of days: a reversal day, a couple of nice trending days, and one inside day.

 

Today the market continues to be on pins and needles waiting for the next financial institution to break down. The short 1st went after BSC, then FNM and FRE, and got what they wanted. Now they are going after LEH – let’s see if that works out for them (an amazing 375mm shares traded today). If it does work the short will soon attack AIG as well. We all have to keep an eye on XLF.

 

Financials are leading the market, especially since for now the inverse relationship we had with oil seems to be broken. Oil has been heading south all week, yet the equity markets don’t seem to be benefiting from cheaper oil. It very well could be from the fact that global consumption of oil has dropped back to levels from 2003 due to the global economic slowdown.

 

As intra day traders we need to be in tune with the flow in the market. Today was a good day to follow the trend down in plenty of stocks. Most of the rallies where a shorting opportunity, it didn’t feel like you could short on the lows since momentum was not as strong as it has been in the past, but the bleeding was there all day, just look at: EMC, JAVA, CSCO, INTC, AIG as examples. You will notice that you really don’t have to look for high beta stocks to make money. At Keystone Trading Group we look for a steady order flow to get involved in, we like a nice steady trend, not the volatility that some intra day traders believe is necessary to make money.

 

We identify the flow in the market and jump on it. We follow that up with discipline, making sure we stick to the plan in terms of managing the trade.

 

Today was a good day for intra day activity – helped by the trend, but most importantly by the return of volume.

 

Thank you Volume!

 

http://keystonetradinggroup.com/KTC_Landing.html#

 

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