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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. To read our full disclosure, please go to: http://www.equities.com/disclaimer


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Results for xlf
Raoul Chopra
27 Apr 15 03:13:25
Deutsche Bank pledges overhaul, shares slide http://t.co/fgBG8FLKMK $DB $XLF
Edward Dowd
26 Apr 15 21:52:08
$SOX $XLF Financials, semis and trannies are huge non confirmations of these new Highs. Friday's Nasdaq move looked exhaustive to me.
Bradley
26 Apr 15 20:58:08
I love this trading girl! $XLF $FXI $BAC $KO $EEM $TLT $EWT $COP $QQQ $VXX $XOP http://t.co/l9JkTCtpHR http://t.co/Omeo8OSGf5
#HelpYouGetGAINS
26 Apr 15 20:41:53
RT @valuewalk: 2010 Flash Crash Arrest: Follow The $$? via @EconMatters $XLF $IYF @TheJusticeDept @CFTC $GS $$ $JPM @nanexllc http://t.co/8…
PennyStock Zone
26 Apr 15 20:31:33
Connor Bruggeman SchoolTrader made $300,000 in 1 yr while in high school http://t.co/w3kYAgQOUj $REGN $MSFT $BIIB $CELG $XLF $UNH
Market Masta
26 Apr 15 20:05:11
The $COMPQ finished up nearly 1% yet $SOXX -1.7% $IBB -1% $XLF flat. So $GOOG $MSFT $AMZN huh, Market forbid these caps begin to sell off.
Your WallSt Reporter
26 Apr 15 18:43:03
Our New Pick! - The BIGGEST MJ Play of 2015 is $UBQU ! See link: http://t.co/GHbsfuTo1P $THCZ - � $XLF $F $FN $MSFT
Matthew Kracht
26 Apr 15 18:28:39
RT @chartseer: $XLF laggards $BRKB $BAC $WFC $AXP http://t.co/2tpelpuzKK
Douglas Dowell, JD
26 Apr 15 18:11:18
RT @valuewalk: 2010 Flash Crash Arrest: Follow The $$? via @EconMatters $XLF $IYF @TheJusticeDept @CFTC $GS $$ $JPM @nanexllc http://t.co/8…
ValueWalk
26 Apr 15 18:05:30
2010 Flash Crash Arrest: Follow The $$? via @EconMatters $XLF $IYF @TheJusticeDept @CFTC $GS $$ $JPM @nanexllc http://t.co/82JHN2uOdz
ETF Checker
26 Apr 15 16:56:14
Another view of $XLF with percent of up, down and in-transition trends. Premium. #underlyingaintlying #etfchecker http://t.co/Z0XNZg7pdE
Sunrise Trader
26 Apr 15 16:07:37
Sector etf's for a quick look candle glance $XLF $XLK and more http://t.co/IBAAsg27D4
Kevin B. Bantz
26 Apr 15 15:26:58
$XLF narrowing rage feels like distribution $TLT http://t.co/CwK8ofHeky
Joe Hentges
26 Apr 15 15:18:21
And the answer is...http://t.co/yAHRlz7g8b $SMH $XHB $XLF $IBB $XLE $DJIA $SPX
MUCKBEAR
26 Apr 15 14:47:16
RT @SunriseTrader: Banks $XLF continues to base but not offering much opportunity yet http://t.co/YZNyQkJQ8k
Sunrise Trader
26 Apr 15 14:45:52
Banks $XLF continues to base but not offering much opportunity yet http://t.co/YZNyQkJQ8k
royfberger
26 Apr 15 12:46:07
Barcelona! Take me back! $XLF $FXI $BAC $KO $EEM $TLT $EWT $COP $QQQ $VXX $XOP http://t.co/JUFJoVvAWo http://t.co/zleKLCe225
McCormicK©
26 Apr 15 12:45:22
RT @NorthmanTrader: Weekend Charts: Misconceptions http://t.co/1HphPrWexw $SPX $NDX $VIX $IWM $NYA $AAPL $GOOG $AMZN $XLF $MSFT http://t.co…
Marco Olevano
26 Apr 15 12:37:19
RT @NorthmanTrader: Weekend Charts: Misconceptions http://t.co/1HphPrWexw $SPX $NDX $VIX $IWM $NYA $AAPL $GOOG $AMZN $XLF $MSFT http://t.co…
Investors Hangout
26 Apr 15 11:54:38
$GLD stock Ask Size Click Here: http://t.co/s5P4bprBBv Also See: $ADT $TNA $KR $XLF #stockmarket #tradeideas ~
PennyStock Zone
26 Apr 15 10:08:18
Connor Bruggeman SchoolTrader made $300,000 in 1 yr while in high school http://t.co/w3kYAgQOUj $REGN $MSFT $BIIB $CELG $XLF $UNH
Stock Forums
26 Apr 15 08:55:55
$XLF stock Investor Opinions Click Here: http://t.co/AL6ELpxv3b Also See: $XHB $IDCC $SLTD $DGAZ #stockmarket #tradeideas ~
Bradley
26 Apr 15 08:38:08
I love this trading girl! $XLF $FXI $BAC $KO $EEM $TLT $EWT $COP $QQQ $VXX $XOP http://t.co/l9JkTCtpHR http://t.co/G7vvzRWAnp
Muathe
26 Apr 15 08:24:14
[VIDEO REPOST] Wknd Mrkt Analysis 04/26/2015 $SPY $UWTI $EEM $GDX $UGAZ $USO $VXX $UCO $EWZ $IWM $RSX $XLF $NUGT $IYR http://t.co/AU3XHQF7X4
nancy
26 Apr 15 08:16:51
RT @NorthmanTrader: Weekend Charts: Misconceptions http://t.co/1HphPrWexw $SPX $NDX $VIX $IWM $NYA $AAPL $GOOG $AMZN $XLF $MSFT http://t.co…
Adam Grimes
26 Apr 15 08:10:58
US Sector performance last week $spy $study $xle $xlk $xly $xlf http://t.co/ibscJysTUG
lizwaite
26 Apr 15 07:37:24
$XLF Been trading sideways since December 2014... Due for a move My inclination is a move to the upside http://t.co/dx4yIgiA98
Rob Hager
26 Apr 15 07:26:55
U.S. #banks push for delay in reporting corporate #bond trades http://t.co/1wzUDjwHO8 via @FT $LQD $XLF
pretty_darn_tasty
26 Apr 15 07:09:57
RT @NorthmanTrader: Weekend Charts: Misconceptions http://t.co/1HphPrWexw $SPX $NDX $VIX $IWM $NYA $AAPL $GOOG $AMZN $XLF $MSFT http://t.co…
Harry D. Bean
26 Apr 15 07:03:13
RT @NorthmanTrader: Weekend Charts: Misconceptions http://t.co/1HphPrWexw $SPX $NDX $VIX $IWM $NYA $AAPL $GOOG $AMZN $XLF $MSFT http://t.co…
Kay Kang
26 Apr 15 06:46:53
RT @NorthmanTrader: Weekend Charts: Misconceptions http://t.co/1HphPrWexw $SPX $NDX $VIX $IWM $NYA $AAPL $GOOG $AMZN $XLF $MSFT http://t.co…
liamkmac
26 Apr 15 06:46:11
RT @NorthmanTrader: Weekend Charts: Misconceptions http://t.co/1HphPrWexw $SPX $NDX $VIX $IWM $NYA $AAPL $GOOG $AMZN $XLF $MSFT http://t.co…
J.S
26 Apr 15 06:37:05
RT @NorthmanTrader: Weekend Charts: Misconceptions http://t.co/1HphPrWexw $SPX $NDX $VIX $IWM $NYA $AAPL $GOOG $AMZN $XLF $MSFT http://t.co…
Alpha Maven
26 Apr 15 06:33:45
RT @NorthmanTrader: Weekend Charts: Misconceptions http://t.co/1HphPrWexw $SPX $NDX $VIX $IWM $NYA $AAPL $GOOG $AMZN $XLF $MSFT http://t.co…
Befree
26 Apr 15 06:32:54
RT @NorthmanTrader: Weekend Charts: Misconceptions http://t.co/1HphPrWexw $SPX $NDX $VIX $IWM $NYA $AAPL $GOOG $AMZN $XLF $MSFT http://t.co…
Jeff Sandene, CFP®
26 Apr 15 06:30:47
RT @NorthmanTrader: Weekend Charts: Misconceptions http://t.co/1HphPrWexw $SPX $NDX $VIX $IWM $NYA $AAPL $GOOG $AMZN $XLF $MSFT http://t.co…
Felipe Encinas
26 Apr 15 06:29:04
RT @NorthmanTrader: Weekend Charts: Misconceptions http://t.co/1HphPrWexw $SPX $NDX $VIX $IWM $NYA $AAPL $GOOG $AMZN $XLF $MSFT http://t.co…
Matt K
26 Apr 15 06:11:13
RT @NorthmanTrader: Weekend Charts: Misconceptions http://t.co/1HphPrWexw $SPX $NDX $VIX $IWM $NYA $AAPL $GOOG $AMZN $XLF $MSFT http://t.co…
nosGOZZ
26 Apr 15 06:09:55
RT @NorthmanTrader: Weekend Charts: Misconceptions http://t.co/1HphPrWexw $SPX $NDX $VIX $IWM $NYA $AAPL $GOOG $AMZN $XLF $MSFT http://t.co…
Northy
26 Apr 15 05:53:00
Weekend Charts: Misconceptions http://t.co/1HphPrWexw $SPX $NDX $VIX $IWM $NYA $AAPL $GOOG $AMZN $XLF $MSFT http://t.co/yST2xwdGZs
PennyStock Zone
26 Apr 15 05:52:32
Connor Bruggeman SchoolTrader made $300,000 in 1 yr while in high school http://t.co/w3kYAgQOUj $REGN $MSFT $BIIB $CELG $XLF $UNH
marketzone
26 Apr 15 05:18:41
http://t.co/RtoUOhlUB6 $SPY, $QQQ, $AAPL, $XLF, $EURUSD, $AUDUSD, $USDJPY - #WeeklyMarketsAnalysis
lizwaite
25 Apr 15 23:11:28
RT @NautilusCap: Financials relative strength at multi-year lows... $XLF $SPY http://t.co/OU9UWUCsuA
Seeking Alpha
25 Apr 15 22:56:23
Sector Earnings And Revenue Beat Rates http://t.co/kqdlU2oaHA $XLB $XLE $XLF $XLI $XLK $XLP $XLU $XLV $XLY
royfberger
25 Apr 15 21:31:06
Barcelona! Take me back! $XLF $FXI $BAC $KO $EEM $TLT $EWT $COP $QQQ $VXX $XOP http://t.co/JUFJoVvAWo http://t.co/pLc28VuM4R
Bradley
25 Apr 15 20:55:06
I love this trading girl! $XLF $FXI $BAC $KO $EEM $TLT $EWT $COP $QQQ $VXX $XOP http://t.co/l9JkTCtpHR http://t.co/1MTXg1HVYj
Declan Fallon
25 Apr 15 16:24:48
#sectorbreadth [70] $XLU > $XLE > [60] $XLK > $XLV > [50] $XLB > $XLI > [40] $XLF = $XLY > $XLP. $SPX bullishness at 58%
PolgarStocks
25 Apr 15 12:40:06
$WMIH Stock Forum Updated Saturday, April 25, 2015 3:07:02 PM $FXI $PZOO $AMGN $XLF http://t.co/OkhVBsCsSc
Rosner Stocks
25 Apr 15 12:39:24
$BIDU Financials Updated Saturday, April 25, 2015 2:59:22 PM $ADXS $XLF $UUP $T http://t.co/x3XHdwVz33
nasdaqfan
25 Apr 15 11:59:37
$BP stock Stock Forum Click Here: http://t.co/d0l6BZQS22 Also See: $HYG $PIR $XLF $FV #stockmarket #tradeideas ~
				
				
By  +Follow October 11, 2013 11:19AM
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