The bigger they are, the harder they fall
Dave Landry is principal of Sentive Trading, a money management firm, and a
principal of Harvest Capital Management. Mr. Landry is the author of two top
selling books,
>Dave Landry’s 10 Best Swing Trader Patterns And Strategies and
>Dave Landry On Swing Trading.
If you would like a free trial to Dave’s Nightly Swing Trading Alerts Report
On Tuesday, the Nasdaq initially traded up but soon found its
high and began to sell off. It found its low around mid-day and then began to
rally. However, it found its high late in the day and then drifted lower for the
remainder of the day.
The S&P put in a somewhat similar performance.
So what do we do?
One would have expected more than an intra-day
bounce from a market that is this oversold. Man, this thing is punk! What’s also
concerning is the fact that the S&P has been held up in part by commodity
related issues. Now that these are taking a hit, one has to wonder what will
stop the slide. As far as shorts, I’m starting to see setups in recently hard
hit tech areas such as telecom and Internet. Just wait for entries and
don’t bet the farm since the market remains so oversold. A safer bet may be to
look to play First Thrusts in the commodity related areas. My thinking here is
twofold: 1. they can trade independently of the indices and 2. they have further
to fall–the bigger they are, the harder they fall.
As far as setups, the energies (and other commodities for that matter) are
set up as a First Thrust. Tetra Technologies
(
TTI |
Quote |
Chart |
News |
PowerRating), in oil service,
looks like it has the potential to resume its recent slide out of a pattern I
call a First Thrust. It’s also a strategy I call a Reversal Gap. Email me if
you need the chapters out my book that cover these (but don’t tell my publisher
I ‘m giving this stuff away!).
Wednesday’s With Dave
Oh, almost forgot: On Wednesday 05/17/06 at 11:00 A.M. EST, I will be doing
my weekly interactive lesson. You’re not going to believe the GREAT
examples we have this week! I’ll also cover current conditions, look at a few
potential setups, and some other stuff. After that, I’ll field your
questions. As usual, admission is free (with a money back guarantee!!!)
but limited by the software. Email me if you need instructions on how to join
and/or the archives.
Best of luck with your trading on Wednesday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
P.P.S. If you would like a free
trial to my trading service, click
here.