Where Is The End Of Year Rally?
On Friday, the Nasdaq chopped sideways in early trading but then began to sell
off. It consolidated and attempted to rally late in the day but sold off hard
going into the close. This action has it closing poorly and keeps it in a
short-term trading range.Â
The S&P generally worked its way lower throughout the
day. It did manage to hold just above its recent breakout levels.Â
So what do we do?  I think the market is
at an inflection point. It seems that everyone is looking for a end of year
rally. Will this occur? Well, it’s beginning to look a little dubious now.
However, keep in mind that when EVERYONE is looking for something, the market
usually does just the opposite–at least initially. Hopefully (and I know that I
shouldn’t hope), the weakness we are seeing is just a “head
fake”–enough to scare out some nervous longs. Since hope doesn’t protect
us, honor your stops on existing longs and take a “show me” attitude
before initiating any new ones. On the short side, I’m not sure it’s time to be
hero and call a top just yet. Therefore, you probably want to stick with areas
that have already rolled over and recently pulled back such as gold and selected
energies.
No setup tonight.
Best of luck with your trading on Monday!Â
Dave Landry
P.S. Reminder: Protective stops on every trade!
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