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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
Kay Kim
27 Aug 14 18:57:45
RT @2TradersClub: [VIDEO] Mid-Week Update with @2kaykim | $SPY $QQQ $IWM $DIA $XLF $TLT $TSLA $AMZN $V $JAZZ $FSLR $GOOGL http://t.co/wocXg…
Traders Club
27 Aug 14 18:55:41
[VIDEO] Mid-Week Update with @2kaykim | $SPY $QQQ $IWM $DIA $XLF $TLT $TSLA $AMZN $V $JAZZ $FSLR $GOOGL http://t.co/wocXgG8fGd
Ripped Torn
27 Aug 14 18:53:24
@JLyonsFundMgmt: Financials were relatively weak today...bear-flaggin it too...looking lower. $C $JPM $GS $BAC $FAS $XLF
PennyStock Zone
27 Aug 14 18:12:44
Best day trading DVD by Fous Alerts check it out! http://t.co/HJ6WDp65fM #stocks #trading #nasdaq #nyse $XLF $HPQ $INTU $INTC $PCLN $QUNR
Day Traders Group
27 Aug 14 17:50:18
$NFLX http://t.co/quMVtJcVq2 MACD bullish crossover alerts $AMAT $IDA $AMBC $XLF $GMCR $BBRY $AMAT $QQQ $IWM $AAPL & more @DayTradersGroup
Business Updates
27 Aug 14 16:55:46
$XLF: [video] Buying the banks http://t.co/QnBsqIweqG http://t.co/vkjgtVscrL
Ron Sen, MD
27 Aug 14 16:22:03
Innocent until proven guilty. http://t.co/igzZs98NYO $SPY $IWM $XLF $SMH $IBB $GS
Jeff Quiggle
27 Aug 14 16:12:52
10 Sector: strongest #healthcare $XLV weakest #energy $XLE strongest today #utilities $XLE weakest today #financials $XLF
Jeff Quiggle
27 Aug 14 16:09:22
Wall Street News
27 Aug 14 15:55:46
$XLF: [video] What's stimulating financials http://t.co/KzfoGoOuHe http://t.co/DEMKtPY91i
Declan Fallon
27 Aug 14 15:02:57
#sectorbreadth ['sell'] $XLU > [80] $XLF > $XLI > [70] $XLP > $XLB = $XLY > $XLV > $XLK > $XLE. $SPX bullishness down 1 point to 78%
27 Aug 14 14:39:09
27 Aug 14 14:31:32
Top Shorted Stocks 08/27/14 1. $SBY 91.42% 2. $UTIW 90.23% 3. $XLV 83.20% 4. $NE 77.74% 5. $SID 76.37% 6. $QQQ 75.28% 7. $XLF 73.20%...
27 Aug 14 14:31:30
Top Shorted Stocks 08/27/14... 7. $XLF 73.20% 8. $TXN 70.64% 9. $EWZ 69.91%... http://t.co/2prWGtm5jY
27 Aug 14 14:09:13
Highest short interest $SPY. $T. $IWM. $AMD. $XLF. $VALE. $BAC
Companies in News
27 Aug 14 13:55:55
$XLF: Financial bulls turn to Goldman Sachs http://t.co/bDV4Ld81tW http://t.co/GZ3riB9ey6
Stock Forums
27 Aug 14 13:45:27
$AAPL EOD Data http://t.co/ACTJeBsoJK Also See: $MBLY $IYT $XLF $ACHN ~
Stock Forums
27 Aug 14 13:36:05
$AA Prev Close http://t.co/7bv57P4Vhk Also See: $XLF $GTAT $IWM $NKE ~
Top ETF Funds
27 Aug 14 13:23:59
[video] Rising rate picks.. http://t.co/koZpW0pLXJ $XLF #ETF #ETFs #Stocks
Top ETF Funds
27 Aug 14 13:23:43
The Jackson Hole Symposium’s impact on a rising rate timeline.. http://t.co/isF8wOh55X $XLF #ETF #ETFs #Stocks
Kenneth Roberts
27 Aug 14 13:10:57
RT @optionmonster: $XLF now up 6.7% year-to-date @CNBCClosingBell
Jon Najarian
27 Aug 14 13:10:38
$XLF now up 6.7% year-to-date @CNBCClosingBell
Mohamed Sadiq Ali
27 Aug 14 12:36:51
RT @HedgeLy: $JPM $XLF “@BloombergTV: BREAKING: FBI said to be probing whether Russia tied to JPMorgan hacking”
The Last Don
27 Aug 14 12:32:17
RT @HedgeLy: $JPM $XLF “@BloombergTV: BREAKING: FBI said to be probing whether Russia tied to JPMorgan hacking”
27 Aug 14 12:31:44
RT @HedgeLy: $JPM $XLF “@BloombergTV: BREAKING: FBI said to be probing whether Russia tied to JPMorgan hacking”
Hedge Accordingly
27 Aug 14 12:31:34
$JPM $XLF “@BloombergTV: BREAKING: FBI said to be probing whether Russia tied to JPMorgan hacking”
Stock Headlines
27 Aug 14 11:55:47
$XLF: [video] Cramer's Mad Dash: Goldman's new world http://t.co/USdxsANRsA http://t.co/tAd1KApSpK
Stock Forums
27 Aug 14 11:05:36
$S Stock Message Board http://t.co/HkbfLXAe5e Also See: $DDD $DB $XLF $WTSL ~
27 Aug 14 11:05:31
$SGLB Last Price http://t.co/oYDGKldx2u Also See: $EWG $TZA $XLF $URBN ~
Stock Forums
27 Aug 14 10:59:21
$RSP Message Board Posts http://t.co/J4okimk13w Also See: $AAPL $XLF $KWK $JNUG ~
27 Aug 14 10:09:38
$IWC TA $IWC Most recent stock chart and technical analysis. $XLF $PPH $SDRL $PANW $FCX $TLT http://stockchart http://t.co/li0drrhI52
27 Aug 14 10:09:06
$SPXS Current Price $SPXS Most recent stock chart and technical analysis. $PANW $MONIF $PLUG $X $YGE $XLF http http://t.co/VCRffxI73l
Business News
27 Aug 14 09:55:46
$XLF: [video] Back to trade school: Shorting a stock http://t.co/TR9xkowrTQ http://t.co/TpsbCfc3ql
27 Aug 14 09:44:42
@flecksthoughts $XLF not caring about yield compression (2-10, 2-30), your thoughts?
Christoph Lahrs
27 Aug 14 09:05:34
RT @ETFdb: Bulls getting defensive $SPY $SPX // $XLU biggest winner by far today (after being the only loser yesterday) --> $XLE $XLF...
Christoph Lahrs
27 Aug 14 09:05:34
RT @ETFdb: Bulls getting defensive $SPY $SPX // $XLU biggest winner by far today (after being the only loser yesterday) --> $XLE $XLF...
Christoph Lahrs
27 Aug 14 09:05:33
RT @ETFdb: Bulls getting defensive $SPY $SPX // $XLU biggest winner by far today (after being the only loser yesterday) --> $XLE $XLF...
ETF Database
27 Aug 14 09:05:06
Bulls getting defensive $SPY $SPX // $XLU biggest winner by far today (after being the only loser yesterday) --> $XLE $XLF $XLI $XLB in red
Market Compass
27 Aug 14 08:55:56
$XLF: [video] Cramer's Mad Dash: Goldman's new world http://t.co/suzIyVGjHe http://t.co/JclT8VeF4q
Sheldon McIntyre
27 Aug 14 08:54:42
$XLF Bullish Outside Month. Since 1998 total number of trades=7. Going out 1 month winning trades=6. Avg Profit Trade %=6.316 @MarketMemory
Investors Hangout
27 Aug 14 08:52:21
clayton: $XLF 23.37 http://t.co/ZXAAavcvR4
Investors Hangout
27 Aug 14 08:52:21
clayton: $XLF 23.37 http://t.co/xY9dv3gmwW
27 Aug 14 08:52:03
http://t.co/Vv1sYDyeQn chartguy89: Stock Charts: CUR Stock Chart $CUR $XLF $XLI $QIHU http://t.co/RabP91KeYo
PennyStock Zone
27 Aug 14 08:51:31
Best day trading DVD by Fous Alerts check it out! http://t.co/HJ6WDp65fM #stocks #trading #nasdaq #nyse $XLF $HPQ $INTU $INTC $PCLN $QUNR
Investors Hangout
27 Aug 14 08:51:16
danrocks: $XLF On Alert $TAN $PANW $XLI $TWTR $TNA http://t.co/oPW3zkkq9F
Investors Hangout
27 Aug 14 08:51:08
danrocks: $XLF On Alert $TAN $PANW $XLI $TWTR $TNA http://t.co/jVQblVdnEX
Dana Lyons
27 Aug 14 08:45:59
Financials relatively weak today...bear-flaggin i/t too...looking lower. $XLF
27 Aug 14 08:37:51
$XLF 23.37 http://t.co/SnySSXJKuZ
Investors Hangout
27 Aug 14 08:34:01
$PBR Open http://t.co/K77APaTEGQ Also See: $FNMA $XLF $MYEC $BITA ~
David Durand
27 Aug 14 08:32:05
$XLF vs $TNX. Common belief that lower rates are bad for financials does not seem to be holding true of late. https://t.co/eZnAo9lfzo
By  +Follow October 11, 2013 11:19AM



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