Short Squeezes, Turnaround Tuesday and ETF Day Trading


Remember the article last week in which Larry Connors warned of impending short squeezes?  That is part of what hit yesterday – the bear is still roaring, so use this opportunity to look for short entries.  Just be careful and stay timid!
By Larry Connors | TradingMarkets.com | October 05, 2011 08:57 AM
 

That was a terrific 400-point reversal yesterday and the market is now back in neutral territory with the 2-period RSI of our Country Fund ETF Universe at 40.18 and the Main ETF Universe at 48.22.

Yesterday’s rally was a very normal, bear market, short squeeze rally where they allowed the shorts to pile in the previous few days and even further in the morning and then, from a rumor about a bailout of Europe, the buyers came in (some with fresh money but likely even more from panicked short sellers).

Again this is normal and if it follows a traditional path, it could go a few days. If this does occur, we’ll look to be heading into the weekend with some indices short positions. In the meantime, the longer term trend is down, we have the Advanced Micro Devices (AMD | PowerRating) and Direxion Financial Bull 3x Shares (FAS | PowerRating) positions with options, and we’re in a good position no matter which direction the market takes for the remainder of the week.

Special Notice – Today at 1 pm ET I will be doing a 30 minute webinar discussing an ETF Day Trading Program we’ll be teaching at the end of the month. This program has historically thrived in high volatility environments like the one we’re in now and yesterday alone in actual trading there were accounts (in real time) which saw gains of 10% and higher.

If you would like to attend today’s ETF Day Trading webinar (or receive a copy of the recording), please call our office this morning at 973-494-7311, ext. 1.

The above is from Larry Connors’ Daily Battle Plan.

To learn more about the Daily Battle Plan, click here for more information.

Larry Connors is founder of TradingMarkets.com

Wednesday, October 5th, 2011 ETF, Larry Connors, Stock Trading

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