The Market Toolbox : You are receiving this e-mail as a part of your free subscription. If you would like to change your e-mail settings please follow the instructions at the bottom of this e-mail.
Instructions to "White List Us". Subscribe To The Market Toolbox via XML

• How To Trade Off "The 10 O'Clock High"
• "Best Of The Web" with a 16 year track record...
• A Link To Last Week's Show Listen Now

Beating The Market For 16 Years Is NOT An Accident... It's A Strategy. For the past 16 years, the GetFolio strategy has consistently outperformed the market achieving an average stock appreciation of over 39 % per year. Combining technical, fundamental, Sector timing, and most importantly, risk/reward analysis all into a simple and easy to use system. Beating The Market Every Year Is Not An Accident It's A Strategy.

Hello Everyone,

This week we are looking at strategies for trading the opening of the market and when to trade "after the market opens".

As we discussed with larry Connors last week on the radio show, most of the inefficiencies in the market occur between the open and ten o'clock. You may want to avoid the madness. One good strategy for gap-up openings is to buy only above the 9:30-10:00 high.

This gives the stock time to settle out in the first half-hour of trading and absorb any selling into the gap. If a stock's opening price is greater than yesterday's high, revisit the 1-minute chart after 10:00 am, and set a long (buy) stop .25 (or slightly) above the high achieved in the first 1/2 hour of trading.

A primary reason that many stocks (that gapped up at open) retreat in the first 1/2 hour of trading, is that - once the pre-market and opening buy orders have been filled - demand for these stocks subsides.

There are many exceptions, and these are what create potentially profitable day-trading opportunities with the picks. Chances are good that if a stock that has gapped up at the open is able to reach a new daily high (after the first half-hour of trading), the strength shown at the open was real because there has been additional and continued buying after the pre-market orders have been filled. This provides day traders the opportunity to use the following strategy:

1. Choose a stock that has opened 1% to 5% over the prior day's closing price.

2. Allow the stock to trade for the first ½ hour after the market opens, and monitor it closely.

3. Set an Alert or Buy Stop Limit Order: After the first half-hour, set an alert 1/4 point above the high of the day.

4. If the stock moves to a new daily high, the alert, or Buy Stop, will be triggered and you should then immediately buy and, at the same time, place a stop-loss sell order slightly below the day's low.

This tactic provides day traders with a fair degree of profit potential. There is also limited down side risk because of the protective stop loss sell order.

More times than not, when a stock gaps up, it then fades back a bit and subsequently pushes higher. When this happens, you may use the opening price as the new entry target.

Let's say we like XYZ. It closed at 40 last night, but it's opening at 40.85. It opens at 40.85, inches to 40.95, and starts pulling back. We don't buy it yet.

Let’s say XYZ falls to 40.65, and now it's pushing higher again. When it gets back to 40.85, we become attentive. If it inches over 40.95, we may consider taking a shot at it.

Frequently, surpassing the first few minutes' high means the stock has cleared out most of its overhead resistance. It could put in a really good day. We don't like large gaps up, over 5%, nearly as much as small ones, say 1-4% - where the stock slowly rises and builds momentum.

But, because large gaps are common, we need to have a plan - and that plan is to enter on the morning high push. Below is a good example of this gap entry strategy

We have seen a lot of great trading opportunities using this strategy and you can too. This is one of the "short-term" strategies the is found in the Stock Picker RT software strategy guide. The Stock Picker RT software is used by short-term traders looking for momentum plays as well as long-term investors who look for consistent earnings growth. If you have not seen it yet... Take a look.

And Now...

"Best Of The Web" GetFolio.com

This week we want to show you one of the best, most consistent strategies around. It's GetFolio. We have known Moti, who runs GetFolio for years and he is still out performing the crowds of so-called gurus.

Definitely check out what he is doing, it's a short read through his site but the 16 year track record should be enough to open your eyes to the extreme profit you could rack up using Moti's strategy. GetFolio.com

Until Next Time...

Best wishes and Good Investing,
Bill McKinley & Doug Newberry
The Investing Systems Network