October 11, 2006 at 11:53 am | | Comments 1


Perma-Bull: Someone who is always bullish on the market.

The market won’t trend higher at this rate forever, that is a given. Eventually I’ll get aggressive on the short side, but not until we get some signals that suggest it’s time – like a dip that isn’t bought!

However, one side benefit of it moving up so much is that the universe of tradable stocks has grown. Volume and price are the two keys for me when it comes to building a watch list of potential trades in my charting program, and we’ve seen an increase in both during the last couple of months. Many stocks are now at higher prices than they were just two months ago, and therefore they are able to fluctuate more. Additionally, many stocks which had been experiencing a lull in activity from May to July have seen a significant increase in volume. This is quite a contrast to bear markets which shrink the tradable universe of stocks through lower prices and less liquidity (volume).

My lower threshold for volume is typically around 200k/day, and I rarely trade stocks below $10.00. I will occasionally make exceptions for each of these if I see a standout chart, but it’s rare. In the past couple of months, I’ve seen an increase in the number of stocks which meet these criteria. That’s a good thing because I’m a picky trader, and having more stocks at the price and volume levels I require is certainly advantageous. Although a larger universe of tradable stocks does translate into more homework, it also means I can continue to focus on the best chart patterns available and trade the cream of the crop.

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Jeff White
President, The Stock Bandit, Inc.

[tags]Stock Trading, Day Trading, Swing Trading, Bull Market, Stock Market[/tags]

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