As I write I am debating whether to trade RIMM or GS. GS is in play because of the news that the bailout may not happen. RIMM reported last night and showed unusual weakness. SMB traded RIMM in afterhours yesterday and chopped it up. So I have a feel for what to look for this AM from RIMM. But we have GS down a ton after such a strong trading day yesterday. Also, NKE held 64 yesterday and if I see a hold at this level I will start a long position. What to trade?
One thing I cannot do is not choose. I cannot get distracted on the Open trying to choose which one will be best. I must choose. I can have one as a backup plan. I can set great prices for the other and switch over if that other stock hits that price. For example I might start with GS and set an alert for near 80 for RIMM. If RIMM hits 80 and GS is not so good than I can switch. What I cannot do is not have a clear road map, or game plan, for what I will be trading this AM.
Personally I would be surprised if at some point during the trading day that news is not released that a deal has been reached on the Hill. When this news is released GS and MS and JPM will almost certainly spike higher. I will get long if I hear news released on a deal.
Leaving politics aside the market’s price action screamed that we needed a bailout. If we do not get one and if news is released that we might not get one then I suspect that bearish price action that we saw before news of a possible bailout will reappear.
Good luck trading. This should be a great and exciting trading day.