Low Volume Day ... Again

Daily Chart of SPY

Looking at the volume bar you would think it was a short session today.  Nope.  Just not much action.  If you have something that needs to get done during market hours, this week would be a good time to take care of it. 

How many stockbrokers does it take to change a light bulb?
 "My God! It burnt out!! Sell all my G.E. stock NOW!!!"
 Two. One to take out the bulb and drop it, and the other to try and sell it before it crashes (knowing that it's already burned out).

Dont be the guy that buys the lightbulb!

Is that a 59er in a pair of Brown Shoes?

Gator's Chart of the Day: BWS

Brown Shoe reported before market on Tuesday and gapped up on what looked like a big beat.  The conference call and failure to raise the top end of guidance quickly reversed the stock and it traded down hard until about 2:30.  It did recover into the close so it could be a 59 minute style trade.

The Trade
As trading begins you are watching for the opening print and the low. Make note of both of these figures.  I like 3 or 5 minute charts for this trade.  When the first green candle prints hit the buy button.  Since this is a bounce trade it is expected that the low of the day has already been made and the stop should be just below that.

This trade will likely move very quickly so be ready to add. If the stock has not yet cleared the opening print then wait for it to clear that level and then add aggressively. If it continues to move higher then fill out your position if you have not already done that with the first two buys. As each successive buy is made place a stop just under that buy point and watch.

When volume begins to slow be ready to take some profits (I like to sell 1/3) but let the rest run. Unless you want to hold the stock longer than today I think it's best to move your lowest stop up to insure you will have profits.

As the name of the technique suggests this trade is likely over in the first hour as the sellers have dumped and the bounce buyers have gotten their fill. I have used this method many times and it's one of my favorites. The risk is very low if you put that stop in as soon as you make the first buy and then respect it.