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Posted by wallmann on July 25, 2007, 12:43 pm
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To get the best "feel" for how the market will
open watch the S&P futures before the market
opens. You can see the S&P futures in the lower
right hand corner of the TV when you're watching
CNBC. (Normally we turn the sound off though.)
Checking the S&P's before the market opens is only
a guide of how the market will open and the market
could go in any direction after it opens, but we
check this number for the opening direction only.
Why?
Because if you're long a stock overnight, on a
trade you're in for 1-3 days for example, selling
the position "market on open" can get you the
highest price of the morning. Especially on the
Nasdaq stocks. When the market looks like it's
going to open strong, a lot of stocks "gap" open,
then come down within 30 minutes to 1 hour of the
open. So sell into strength.
By the same token, do not enter your buy orders
"market on open" when the S&P futures are up
before the open because you'll end up paying too
high of a price by competing with the crowd. If
you're looking to buy, sometimes it's best to wait
30 minutes or so after the open because usually by
then, the froth has worn off the market and things
have settled down a little.
For a tip on How To Be A Winner, just send a blank email to:
stocks2watch@sendfree.com
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