“The desire for constant action irrespective of underlying conditions is responsible for many losses on Wall Street even among the professionals, who feel they must take home some money every day, as though they were working for regular wages” – Jesse Livermore, ‘Reminiscences of a Stock Operator’.

After the US market plummeted overnight (Dow Jones -2.2%, Nasdaq -2.7%) there was only one direction for our market to go. The XJO gapped down on the open, down further in morning trade to move sideways into the close which was near the lows. A large range bar on increased volume, it would seem 4200 would be the next target. Volatility is also on the up. Quality, low risk setups are rare and opening gaps are common. Another 2.3% lower today, the XJO closed down 100.8 points, with heavy selling across the board, except for the Gold sector which closed up 1.5% after the precious metal saw new highs overnight. As a result we now see the ASX Systematic Portfolio take defensive action. Caution required.

Similar stock trading tips:

1. Thursday 14th July, 2011
2. Wednesday 20th July, 2011
3. Monday 1st August, 2011