This Simple Technique Could Keep You Out Of Trouble
On Thursday, the Nasdaq opened firmer and aside from a few
pullbacks, generally worked its way higher throughout the day. This action has it
bouncing nicely off of support and closing well.
Although it lagged the Nasdaq in both points and percentage
move, the S&P had a good day too. This action also has it bouncing off a
support level and closing well.
Wednesday’s pivot high could provide minor resistance
here.
Looking to the sectors, some, like the market itself,
stopped and reversed right at key support. This action keeps groups like the
homebuilders alive–for now. Other areas such as broker/dealer (this is
especially true within the sector) and biotech remain questionable. The semis
came roaring back but so far, still look like they are forming a top.Â
So what do we do? As if on cue, the
indices stopped precisely at support and turned right back up. Normally it’s not
that easy–you usually get some sort of fake-out move first. This has me
slightly skeptical but I have to believe in what I see. There are some groups
such as those mentioned above that remain questionable. Therefore,
now is probably a good time to be on your toes. If the market continues its
rally from support, then it appears we have dodged a bullet. However,Â
should it turn right back down, then the best opportunities will likely be in
transitional shorts (First Thrust, Bow Ties, Inverted Cup and Handles etc….as
usual, email me if you need more information). Considering the above, I think
both sides can be played for now. However, you might want to wait for entries
(on either side). This alone could help keep you on the right side of the
market.
Looking to potential setups, on the short side, the Nasdaq
Biotech Ishares
(
IBB |
Quote |
Chart |
News |
PowerRating), mentioned recently, still appear to be in the process of forming a First
Thrust/Bow Tie formation. Wait for an entry though (or for the aggressive,
some sort of opening reversal) because they were up sharply on Wednesday.Â
Best of luck with your trading on Friday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
“….. I have learned more from you than any other traders I have studied thru the years. Your writing is so easy to understand. And your setups actually make money!! I use your trend qualifiers, simple pullbacks, TKOs, trend pivot
pullbacks, and bow ties to trade the futures markets……. I’ve had your book for almost a year, and I still read it often.
THANKS for such a great book and articles on TM.com…………..”
Lin S.
