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Traders Playing the Shutdown Should Avoid Staying too Long

By  +Follow October 11, 2013 11:19AM
Tickers Mentioned:

After enjoying a mostly steady summer, investors and traders are now back in the thick of an increasingly volatile market due in large part to the squabbles going on in the nation's capitol. While up-and-down price swings does create more opportunities to find short-term profits, it also creates more chances to give back those profits--if not more. In this week's interview with Toni Turner of TrendStar Trading Group, we discuss her thoughts on the current market environment.

EQ: As we approach the Oct. 17 deadline for the debt ceiling, the market is becoming more susceptible to major swings from the ongoing debates on Capitol Hill. From a trader’s perspective, do you see this as more of a trading opportunity or elevated risk?

Turner: It depends on what timeframe you’re trading on. It’s a great short-term trading opportunity, and by that, I mean day trading, and holding only your most conservative positions  overnight. So, for day traders, I think the recent volatility is a great opportunity to earn short-term gains.

As far as holding high beta names overnight, I am not doing that right now. Until an actual resolution takes place in the Washington, DC deadlock, I am not going to be backing up the truck and packing  big longer-term positions into my portfolio. We have to remember that a lot of Thursday’s up-move consisted of short covering, which drove up equities prices rapidly in addition to the buying.

I am still cautious here, so I will not be purchasing high-beta names until there isn’t a resolution.

EQ: What are a few high-beta names that are prominently in the headlines that you’re staying away from?

Turner: Those names would include Facebook (FB) , Tesla (TSLA) , Google (GOOG) , and other high growth type stocks. Stocks in the social media ETF and the tech stocks that people talk about are good examples of one area. These high-growth or high-beta names typically have high P/E ratios and small or no dividends, so there’s no reason for people to hold them.

Also, most of the people in these high-beta names, which are also called momentum, and recently “cult” stocks, are traders. Of course, traders are very fickle. I know because I am one. If it looks like the market will sell off, , we have no problem selling a stock in a heartbeat.

EQ: The S&P 500 fell to the 1650 area earlier this week but managed to bounce off of it Thursday. A few weeks ago, you said the 1650 area represented a strong support line. Is that still true now?

Turner: It is still true. I would still look at 1650, and would also look at 1670 because we have a strong uptrend line there. at that level . W e wouldn’t want to see either one of those levels  broken again.

EQ: Earnings have just about taken a backseat right now because of what’s going on in Washington. Could this potentially be a good opportunity to find some overlooked value here?

Turner: It could, that is if you want to hold small positions overnight. That said, I am keeping my positions limited. In Toni’s Market Club, during the earnings season, we choose stocks with good potential earnings report that will announce about three weeks ahead. I If the chart pattern is favorable, we may enter that stock on the long side about three weeks before they’re due to report earnings, and hold until just before the earnings date.

We sell it and take profits before the actual announcement. You can attribute this to the old buy the rumors, sell the news tactic. It seems to work pretty well. Again, you have to have the right setup and you have to know about the potential earnings to know if it’s a viable opportunity.

EQ: What sectors or industry groups are you watching right now?

Turner: There are so many great technical setups that have come out on Thursday. So many stocks have pulled back to swing lows, and then bounced off support.  This presented us with some fantastic  opportunities. Of course, the stalemate in Washington is holding me back from entering many trades.  Washington is full of headline risk,  and an agreement is not yet a reality.

If we get any kind of agreement over the weekend, I will   tiptoe into some positions. There are some sector ETFs that look interesting to me should we reach an agreement. They include: Financial Select Sector SPDR ($XLF), SPDR S&P Regional Banking ETF ($KRE), Industrial Select Sector SPDR ($XLI), Consumer Staples Select Sector SPDR ($XLP), Utilities Select Sector SPDR ($XLU), iShares U.S. Telecommunications ETF ($IYZ), iShares U.S. Real Estate ETF ($IYR), and PowerShares Dynamic Leisure & Entertain ($PEJ).

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.

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Results for xlf
23 Oct 14 08:42:11
Our Penny Stock Picks Gained 371% In 2 Weeks! Get Our Next Pick Early: http://t.co/z2noBUWrEP $XLF $F $FN $MSFT
23 Oct 14 08:37:17
$EFA 50 Simple Moving Average $EFA Most recent stock chart and technical analysis. $KO $JNK $XLF $ACT $LCI $AB http://t.co/CRciL72EAD
23 Oct 14 08:32:36
$XLF Up to date company activities and other important information about $XLF http://t.co/Nlx0AOTV2u
23 Oct 14 08:26:43
$SPY taking a chunk out of her for a little over $9, doing the same for $XLE, $QQQ, $XLF etc etc. 16800 area will be tough!
Jesse Felder
23 Oct 14 07:58:18
$IWM and $XLF both right at their respective 61.8% retracements here.
23 Oct 14 07:55:51
Watch for market drop,Fed = next week.60% cash on sidelines for Market retest of lows. $spy $gdx $ung $aapl $hemp $free $xlf $wti $wlt $gld
Frank Zorrilla
23 Oct 14 07:46:21
$XLF with t2106 at 204, assuming this time is different this enticing to me on the short side http://t.co/iWfUalStMH
23 Oct 14 06:47:47
$BAC still my favorite in financials group. Consolidating now but poised to go higher $XLF
23 Oct 14 06:46:00
If you want to bet the economy isn't going to tank, banks and industrials are the two sectors to start placing those bets $XLF $XLI
23 Oct 14 06:39:27
Technical Alert: Financial Sector ETF has a Bullish MACD crossover at 9:39am $XLF http://t.co/1JWBeMhvtM #sccalerts #stockcharts
23 Oct 14 06:31:41
Another gap up open. Seeing lots of those lately. Cautious. $SPX $RUT $XLF
Financial Iceberg
23 Oct 14 05:49:10
SP500 Financials Bull% Index: Level not seen since December 2011 ? $SPY, $SPX, $ES_F, $XLF http://t.co/T2O34m8Xaf
IH News Desk
23 Oct 14 05:11:52
$CORN Quotes Click Here: http://t.co/QEobrpsje8 Also See: $CELG $ZSL $XLF $TWTR ~
Ro Patel
23 Oct 14 05:03:49
MBA: Refinancing index up 23% in Oct 17th wk vs up 11% prior wk. Purchase index down 5% vs down 1% prior & down 9% y/y - $XHB $XLF $MORT
IH News Desk
23 Oct 14 01:59:48
$AXP Last Price Click Here: http://t.co/uos4axPomU Also See: $UTX $PANW $SDRL $XLF ~
Stock Relay
22 Oct 14 23:14:26
$EFA Open Click Here: http://t.co/jORTFnGM0U Also See: $MJNA $AA $GOOG $XLF ~
Ticker Report
22 Oct 14 22:28:00
Short Interest in Select Sector Financial Slct Str SPDR Fd Drops By 4.5% $XLF http://t.co/z5WPOOz1Io
22 Oct 14 21:33:23
NEW POST: Late Night Strategy for Thursday http://t.co/dJJKAiqf7T $GS $IWM $QQQ $SPY $XLF
22 Oct 14 18:12:23
@momotrader keep your eye on the $QQQ, $XLF and $IBB here/$TRAN/$SOX and $DAX.
22 Oct 14 17:37:04
Levels to watch tomorrow (10/23) - http://t.co/j60TO6D96O $YELP $AMZN $DDD $DIA $IWM $QQQ $SBUX $SPY $TSLA $XLF
Langan Stocks
22 Oct 14 16:18:58
$FNMA Message Board Posts Click Here: http://t.co/RSFB3c1fe1 Also See: $EBAY $TSLA $HD $XLF ~
Jeff Quiggle
22 Oct 14 15:26:31
Stock Relay
22 Oct 14 15:00:39
$ACHN Exchange Click Here: http://t.co/yhBoa7C2ly Also See: $XLF $EUO $JNUG $F ~
22 Oct 14 14:52:52
Our Penny Stock Picks Gained 371% In 2 Weeks! Get Our Next Pick Early: http://t.co/z2noBUWrEP $XLF $F $FN $MSFT
22 Oct 14 13:55:18
"@alphatrends: Video http://t.co/sOf2VOryaK Midweek Stock Mkt Analysis 10/22/14 $SPY $QQQ $IWM $XLF $SMH $AAPL" great stuff.
22 Oct 14 13:54:03
#ActiveViews Per earlier - Like the setup - So nice (even for day) when it works so well. Lets see whats next!? $SPY $QQQ $XLK $XLF $VIX
Sunrise Trader
22 Oct 14 13:43:18
Nicely presented TY Brian RT @alphatrends: Video http://t.co/ovdPJWbJ3y Midweek Stock Mkt Analysis 10/22/14 $SPY $QQQ $IWM $XLF $SMH $AAPL
Brian Shannon
22 Oct 14 13:25:13
Video http://t.co/aJefqWkhPn Midweek Stock Mkt Analysis 10/22/14 $SPY $QQQ $IWM $XLF $SMH $AAPL
22 Oct 14 13:23:10
Index/Sectr $DIA, $SPY, $QQQ, $IWM, $XLB, $XLE, $XLF, $XLI, $XLK, $XLP, $XLU, $XLY, $XRT, $XLV, $IYT http://t.co/Not9mJiNm2
Tommy P.
22 Oct 14 13:10:27
$XLF failed 50-EMA today.
Ro Patel
22 Oct 14 12:44:19
Fed data: Consumer lending up 6% above 2013, but much of rise due to loans to wealthy custs in banks' brokerages - $SCHW $ETFC $AMTD $XLF
Chasing Stars
22 Oct 14 11:30:00
$BRK/B Market Cap Click Here: http://t.co/DkLn3xST75 Also See: $XLF $IBM $EEM $MMM ~
Darlene S Williams
22 Oct 14 11:12:35
22 Oct 14 11:00:28
Our Penny Stock Picks Gained 371% In 2 Weeks! Get Our Next Pick Early: http://t.co/z2noBUWrEP $XLF $F $FN $MSFT
Stock Forums
22 Oct 14 10:42:06
$BAC Yield Click Here: http://t.co/qyARdJleW7 Also See: $XLF $NM $WMIH $EBAY ~
Rosner Stocks
22 Oct 14 09:44:05
$AKRX Stock Forum Click Here: http://t.co/7zRDJJXvZW Also See: $XLF $ARIA $AMBA $EEM ~
22 Oct 14 09:31:56
$XLP alot of talk going around about this one $MYEC $HAL $GILD $XLF $GOOG http://t.co/qwZ3ol3hBv
Investors Hangout
22 Oct 14 09:23:43
leahanne: $XLF Financial Select Sector SPDR (XLF) 22.92 http://t.co/kHXnIrcVwo
Investors Hangout
22 Oct 14 09:23:39
leahanne: $XLF Financial Select Sector SPDR (XLF) 22.92 http://t.co/37vNVv44WP
22 Oct 14 08:56:17
$XLF Financial Select Sector SPDR (XLF) 22.92 +0.05 (+0.22%) $YY $LMT $IVV http://t.co/haSH4EOGvq
BNK Invest
22 Oct 14 08:10:31
Noteworthy ETF Outflows: $XLF $BAC $C $AXP #etfs http://t.co/fAuxUAK29y
22 Oct 14 08:10:28
Noteworthy ETF Outflows: $XLF $BAC $C $AXP #etfs: Symbols mentioned in this story: XLF, BAC, C, AXP E... http://t.co/MvJ39YP9kV
22 Oct 14 07:57:10
$EFA Opinion Today Click here to find out if $EFA is a buy hold or sell. Watching these stocks. $BIDU $XLF $SU http://t.co/PC9P4t4dem
Anmol Singh
22 Oct 14 07:44:09
Only Longs I have is $SRPT and $FAZ which is actually bearish of $XLF so not really a long lol. $SRPT only long I have at the moment
Stock Forums
22 Oct 14 07:41:45
$XOM % Change Click Here: http://t.co/0MzlS6pHsL Also See: $XLF $NKE $AMZN $JPM ~
Investors Hangout
22 Oct 14 07:34:19
Jake13: $XLF Opinion Today Click here to find out if $XLF http://t.co/w5JGcHD0Pz
Investors Hangout
22 Oct 14 07:34:12
Jake13: $XLF Opinion Today Click here to find out if $XLF http://t.co/fy7INpXrJV
22 Oct 14 07:32:44
Refinancing leads jump in mortgage applications http://t.co/68xovwUjLE $WFC $JPM $BAC $XLF
22 Oct 14 07:30:55
http://t.co/hjgLwIcNgz Jake13: $XLF Opinion Today Click here to find out if $XLF: Jake13 http://t.co/bQHecv5QGs http://t.co/hjgLwIcNgz
22 Oct 14 07:30:52
http://t.co/QkCFZ8H3V8 Jake13: $XLF Opinion Today Click here to find out if $XLF: Jake13 http://t.co/MF4mrkFf96 http://t.co/QkCFZ8H3V8
By  +Follow October 11, 2013 11:19AM



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