Boy, I go away for a week, the market rallies. I return, it drops. I know, it’s silly, but this is sometimes exactly how traders think.
Yet, while I don’t think I’m the cause of the market decline, the fact is it hasn’t done a darn thing since the recent breakout earlier this month. On the other hand, it hasn’t quite dropped enough to present any big buying opportunities.
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That leaves us clearly on the sidelines waiting for either a bigger dip to buy, or a big rally to sell.
When looking to buy stocks on dips, it’s always a good idea to buy at a point you think a bounce is likely. That place is often at previous lows and that strategy worked well Friday morning with Sirius (NASDAQ: SIRI). (I wasn’t greedy, by the way, and sold into the surprising rally later that morning.)
There’s a fair amount of foreign stocks I like, and I trade them using their American version in the form of an ADR. The only problem is they gap up and down a bit, so if you trade these, always use limit orders.
I did this with Novartis (NYSE:NVS) and am hoping for a gap up on Monday morning.
That’s it from the tundra they call DC, where snow – snow? – is in the forecast again. Maybe just go long Toro and be done with it?