During last Thursday’s bout of panic selling in the market, someone came on CNBC and said their was a rumor that E*Trade was just one more company involved in this sub-prime debacle. Perception is so important in the market. I see E*Trade has came out with “AN IMPORTANT MESSAGE TO E*TRADE CUSTOMERS”. Part of that message states,

“E*TRADE is a financially healthy organization. We have disclosed in great detail our limited exposure to credit risk in sub-prime mortgages — less than one fifth of one percent of E*TRADE’s overall mortgage portfolio. The vast majority of financial analysts who monitor our business applauded our proactive efforts to add transparency, and are indicating that market concerns about our portfolio are exaggerated.”

When stocks were being thrown out, this fact was blind to those in pain. Perception is reality.

Stocks are gapping higher this morning. 20-day moving averages are looming just overhead for the major U.S indexes. The selling isn’t over. We’ll see if those caught in that painful slide last week have enough buying power to sustain this bounce. Yesterday, I sold the last of some swing ETFs I bought during the panic. Ride the bandwagon, and hop off before it blows a tire. I’m waiting for a sell signal on the daily charts, before trying too many shorts. It will come.

Meanwhile, keep track of recent IPOs. Action there has been fantastic. I imagine it’s because they have no overhead to contend with. VMW - VMware, Inc. gave a classic buy signal yesterday.

After scalping a few ETFs, and taking this trade in AEM - Agnico-Eagle Mines Ltd., I turned my screens off for the day.

The stock of AEM started the day with a bullish wide range bar, for the first five minutes of trading. The stock pulled back four candlesticks, and put in the higher-high buy signal. Two more wide range bars pretty much indicated to me that the stock would probably need a rest. I sat around for an hour, and trading action was dead. I felt it was better to leave, than try and trade a market that’s choppy, and not easy for me. Possibly, market direction and a trend will become more clear tomorrow. I often feel on Monday’s after options expiration, there’s a slower pace to trading.