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Traders Playing the Shutdown Should Avoid Staying too Long

By  +Follow October 11, 2013 11:19AM
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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
Jeff Davis
27 Jan 15 08:46:16
$XLF cant shake vwap..hmm weird in front of the Fed..usually playbook 101 buy banks in front of the Fed
Investors Hangout
27 Jan 15 08:25:40
danrocks: $MRK any other opinions on this? $XLF $DRYS $AKS http://t.co/N1tdH59ZE4
Investors Hangout
27 Jan 15 08:25:40
danrocks: $MRK any other opinions on this? $XLF $DRYS $AKS http://t.co/pXMAIbJxCA
Investors Hangout
27 Jan 15 08:25:40
lookn4wins: $XLF TA $XLF Most recent stock chart and http://t.co/37gb9LMSvM
Investors Hangout
27 Jan 15 08:25:39
lookn4wins: $XLF TA $XLF Most recent stock chart and http://t.co/qQHSmjBZHx
iHangout
27 Jan 15 08:20:38
lookn4wins: Xtremepicks Alerts: $XLF TA $XLF Most recent stock chart and http://t.co/B9fKTxxRKy
iHangout
27 Jan 15 08:20:19
lookn4wins: Xtremepicks Alerts: $XLF TA $XLF Most recent stock chart and http://t.co/QufOvjADbm
lookn4wins
27 Jan 15 08:19:16
$XLF TA $XLF Most recent stock chart and technical analysis. $SLW $EBAY $AMZN $BITA $SMH $XOM http://stockchar http://t.co/dROFyXsA8t
Eternity101
27 Jan 15 08:13:09
RT @KeybottheQuant: #Keybot is back on the short side; watch $NYA 10812, $VIX 16.02, $SOX 673.90 and $XLF 24.05 to see if stocks can recove…
Keybot the Quant
27 Jan 15 08:11:59
#Keybot is back on the short side; watch $NYA 10812, $VIX 16.02, $SOX 673.90 and $XLF 24.05 to see if stocks can recover, or not. $SPY $SDS
Jake13
27 Jan 15 08:04:31
$TQQQ Buy or Sell? Click here to find out if $TQQQ is a buy hold or sell. Watching these stocks. $XLF $AMZN $S http://t.co/Rf3hhRqgKm
Top ETF Funds
27 Jan 15 08:01:14
Market demand rose for 6-month Treasury bills.. http://t.co/BWVUzvYSLZ $XLF #ETF #ETFs #Stocks
danrocks
27 Jan 15 08:00:55
$MRK any other opinions on this? $XLF $DRYS $AKS $SWKS $FB http://t.co/9xNnDItTuC
Grant Dossetto
27 Jan 15 07:46:29
@KeithMcCullough Risk reprices quickly. Action in $XLF, $ITB and semis post earnings should have been clue that big cap in trouble this wk.
raythemoneyman
27 Jan 15 07:13:36
The Cult of Central Banking http://t.co/XqF2eHY7qD $XLF $BANK
Lauren Holmes
27 Jan 15 07:09:44
$BAC Stock to watch $XLF $SPY $WFC $GS $JPM $C Read our analysis here: http://t.co/VrsGMCgPOC
Investors Hangout
27 Jan 15 06:53:22
danrocks: $XLF Alert $GEVO $KITE $XLY $FCX $FXCM http://t.co/x3xhPbKbIa
Investors Hangout
27 Jan 15 06:53:15
danrocks: $XLF Alert $GEVO $KITE $XLY $FCX $FXCM http://t.co/ucjvi3aSUK
Stock Rocket
27 Jan 15 06:51:44
Our Penny Stock Picks Gained 968% In 5 Weeks! Get Our Next Pick Early: http://t.co/wMEn6i1tkM $XLF $F $FN $MSFT
danrocks
27 Jan 15 06:47:07
$XLF Alert $GEVO $KITE $XLY $FCX $FXCM http://t.co/o6AMdn4rvl
lookn4wins
27 Jan 15 06:45:44
$SUGO Stock Chart $SUGO Most recent stock chart and technical analysis. $XLF $NSEH $SBUX $SPXU $IBB $ECIG http http://t.co/wXJKFLlaS1
TJ Valenzuela
27 Jan 15 06:44:10
RT @KristenScholer: Stocks slump on poor earnings, disappointing data & unfolding Greek drama. Dow -314 at low. Growth-sensitive sectors $X…
IH News Desk
27 Jan 15 06:40:36
$XLF Reviews Updated Tuesday, January 27, 2015 09:11:23 AM $FXE $EFA $UVXY $ITB http://t.co/jE2Sy9KYe0
Kristen Scholer
27 Jan 15 06:40:15
Stocks slump on poor earnings, disappointing data & unfolding Greek drama. Dow -314 at low. Growth-sensitive sectors $XLK $XLI $XLF $XLB lag
Seth
27 Jan 15 06:37:05
$XLF bought more March 22 puts at .20
PolgarStocks
27 Jan 15 06:36:11
$TY Last Price Updated Tuesday, January 27, 2015 09:07:24 AM $VGK $XLF $PBR $UGAZ http://t.co/dR0teecSIJ
Brian Kelly
27 Jan 15 06:34:05
RT @AgentBizChange: @BKBrianKelly @CNBCFastMoney Clarification -- sell $XLF was your final trade.
Leslie C Thomas
27 Jan 15 06:17:54
@BKBrianKelly @CNBCFastMoney Clarification -- sell $XLF was your final trade.
DR JAMES CABOT
27 Jan 15 05:55:19
RT @BKBrianKelly: .@CNBCFastMoney which means the banks may be overvalued here $XLF final trade
Brian Kelly
27 Jan 15 05:52:51
.@CNBCFastMoney which means the banks may be overvalued here $XLF final trade
PolgarStocks
27 Jan 15 05:34:37
$XLF Stock Price Updated Tuesday, January 27, 2015 08:07:23 AM $SBUX $XRT $AAPL $GFI http://t.co/xJQxsfQFDX
Top ETF Funds
27 Jan 15 03:53:49
Your first trade for Tuesday, January 27.. http://t.co/YbwKIVEj8D $XLF #ETF #ETFs #Stocks
Langan Stocks
27 Jan 15 03:24:11
$TNA Recent News Updated Tuesday, January 27, 2015 06:03:19 AM $XLF $TIP $AMZN $GDX http://t.co/RGc51ZPBmG
TalkMarkets
27 Jan 15 02:56:18
Acropolis Now: #Currencies & #Crude Tumble But #Stocks Levitate On Massive Short Squeeze $SPX $INDU $IWM $XLF $ERO http://t.co/wBMqEkZtkC
Rosner Stocks
27 Jan 15 01:31:26
$T Opinions Updated Tuesday, January 27, 2015 03:59:24 AM $ACT $CREE $TASR $XLF http://t.co/p1zDPIvaBg
TalkMarkets
27 Jan 15 00:56:01
WhatsTrading Recap - 01/26/2015 $XLE $XLY $XLF $XLV $XLU $XLI $XLK $VIX $CAT $MSFT $COH $AKS $CVX $AAPL http://t.co/ldR66OeiBt
PolgarStocks
26 Jan 15 23:29:09
$IYR Company Info Updated Tuesday, January 27, 2015 02:07:25 AM $XLE $XLF $JNJ $XLE http://t.co/oXgRq7jvNT
PolgarStocks
26 Jan 15 23:29:08
$SPXL Opinions Updated Tuesday, January 27, 2015 02:07:25 AM $AVGO $INTC $XLF $WBA http://t.co/U00re7R7rm
Stock Rocket
26 Jan 15 22:40:46
Our Penny Stock Picks Gained 968% In 5 Weeks! Get Our Next Pick Early: http://t.co/wMEn6i1tkM $XLF $F $FN $MSFT
Seeking Alpha
26 Jan 15 21:47:53
Momentum Serves This Financial ETF Well http://t.co/sTFcTtip5p $VFH $XLF $PFI
Alpha Maven
26 Jan 15 21:16:03
RT @alphatrends: ICYMI my VIDEO http://t.co/v8HY7mGEp7 Stock Mkt Analysis 1/23/15 $QQQ $IWM $XLF $AAPL $ORCL $RGLS $FEYE $AMZN $GPRO $N…
Avon
26 Jan 15 21:12:24
RT @alphatrends: ICYMI my VIDEO http://t.co/v8HY7mGEp7 Stock Mkt Analysis 1/23/15 $QQQ $IWM $XLF $AAPL $ORCL $RGLS $FEYE $AMZN $GPRO $N…
PortfolioWorkstation
26 Jan 15 20:28:10
Here's a pic of what we're seeing with SPDR sector ETFs this January in Portfolio Workstation. $XLV +3.7%, $XLF -3.9% http://t.co/zhfP4gGzy0
PolgarStocks
26 Jan 15 20:27:51
$IWC Recent News Updated Monday, January 26, 2015 11:07:26 PM $MWV $XLF $UPRO $AZFL http://t.co/shXYDfx4cv
TalkMarkets Recap
26 Jan 15 19:04:32
WhatsTrading Recap - 01/26/2015 $XLE $XLY $XLF $XLV $XLU $XLI $XLK $VIX $CAT $MSFT $COH $AKS $CVX $AAPL http://t.co/sjEAlgmrK4
Langan Stocks
26 Jan 15 18:15:04
$GE Short Sales Updated Monday, January 26, 2015 9:03:25 PM $CMG $XLF $OIL $XIV http://t.co/iu2cw6gAU8
Jeff Quiggle
26 Jan 15 17:49:33
10-Sector > $XLU $XLV $XLP $ITB $XLY $XLK $XLB $XLI $XLE $XLF Yesterday > $XLU $XLP $XLV $XLY $XLK $XLB $XLI $ITB $XLF $XLE
Jeff Quiggle
26 Jan 15 17:49:31
10-Sector: strongest #utilities $XLU weakest #financials $XLF strongest today #home-construction $ITB weakest today technology $XLK
PolgarStocks
26 Jan 15 17:24:54
$XLE Short Sales Updated Monday, January 26, 2015 8:07:24 PM $XLF $MO $CPRX $BBRY http://t.co/rR4lUEDOdk
Langan Stocks
26 Jan 15 17:14:15
$MO Stock Price Updated Monday, January 26, 2015 8:03:26 PM $SBUX $SUGO $XLF $LUV http://t.co/WUZcQBAGOj
				
				
By  +Follow October 11, 2013 11:19AM
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