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The market is hot! Everything seems to be moving. After almost four years of a pretty non-volatile market, the recent volatility in the market has taken the interest of all traders. In a more volatile market one has to remember that a looser stop is absolutely necessary to avoid being shaken out of positions. While the risk is greater, in a volatile market return potential increases as well.

Several of my recent ideas remain around the opening price while others have been doing very well. However, I have to attribute some of these quick gains to general optimism from the market today. Because I have been very bullish on a variety of momentum names, these shoot up quickly on days like Wednesday. But it's a double-sided sword -- when the market gets hit, these things get hit harder. I believe that if proper risk controls are in place, most importantly a stop-loss, then trading these names is a much more lucrative game than gaming normal stocks.

Most of my ideas these days are technically-oriented and there's a pretty simple explanation for this: the market isn't cheap enough to turn up tons of value investments -- my primary fundamental-based investments. While I've managed turn to up a couple value ideas, most notably Earthlink (NASDAQ: ELNK) here, I've also managed to turn up several growth-based fundamental ideas such as American Science & Engineering (NASDAQ: ASEI) (which reported great earnings the other day) here.

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Playing the market in coming months originally appeared on BloggingStocks on Thu, 09 Aug 2007 12:58:00 EST. Please see our terms for use of feeds.

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