Reasons NOT To Trade This Market
On Thursday, the Nasdaq opened flat but soon began to
rally. It remained strong throughout most of the day before finally
drifting going into the close. This action has it closing well and puts it
back above its 50-day moving average. 2100 remains resistance here.Â
The S&P put in a similar performance. This action
has it also closing well and also puts it back above its 50-day moving average
1140-1160 remains resistance here. Â
So what do we do? Just two short days ago,
the market was down sharply. Now today (Thursday), it’s up sharply. From a
momentum trader’s perspective, this lack of follow through is frustrating (to
the say the least). Also, out of the 7,000 stocks I scan nightly, I was
unable to find any meaningful setups. Usually, this is a sign that I should
stand aside. Therefore, avoid making any big bets until the market can prove
that it can follow through–in either direction. One last point, if you do
decide to buy this market, use caution since the A) the VIX is hovering near
multi-year lows (a sign of complacency) and B) As mentioned for some time now,
the indices remain below a substantial amount of resistance.Â
Best of luck with your trading on Friday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
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