What You Need To Know About Everyone Who Has Bought This Market Over The Last Month
On Tuesday, the Nasdaq opened slightly firmer but quickly found its high and
sold off hard. It consolidated throughout mid-day but the selling resumed in
afternoon trading. This action has it continuing to break down out of a
wedge.
Ditto for the Ps.
The continued slide from the bearish wedge pattern is
concerning. This action creates a tremendous amount of overhead resistance.
Think about it. Anyone who has bought into the market over the last month is now
at a loss and might be inclined to try to get out at breakeven (if the market
rallies). The sector action is also pretty ugly (is that an oxymoron?) too. Of
the 239 sectors that I track, only 7 ended higher. This has many breaking down
below multiple tops. Unless we see the mother-of-all turnarounds soon, this
could suggests a possible transition lower. Said alternatively, a top.
So what do we do? The market is now too oversold for
shorting. Trail your stops lower on existing positions and take partial profits
if you haven’t already done so (see my recent audio/visual learning example on
Audible
(
ADBL |
Quote |
Chart |
News |
PowerRating) for more on this—email me if you need the link).
No setups tonight. Considering the conditions, we could see
numerous shorts setting up very soon.
Best of luck with your trading on Wednesday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
P.P.S. Learn my newest and most advanced version of my Bow
Ties Strategy. Click
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