These Two Important Long-Term Trends Could Be Coming To An End
System Update
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
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Lately, I’ve been joking about a 100% correct
system where you trade in the opposite direction of the close. Well, this has
now worked for 9 out of the last 9 days (basis the S&P). Keep in mind that I AM NOT making a case to
trade this system! The point I’m trying to make is that the market has been
choppy as summer draws to a close.
On Friday, the Nasdaq chopped back and
forth in a fairly narrow range. It is nearing its 50-day moving average.
The S&P ended slightly higher but well off its
worst levels. This action keeps it right at its 50-day moving
average.
So what do we do? As you can see above, in
addition to being choppy, the market has generally made lower lows and lower
highs as of late. This is most obvious in the Nasdaq. The sector action remains
generally poor with interest sensitive areas and retail continuing to work their
way lower. Technology, like the Nasdaq itself, is also becoming questionable.
Even the areas that have been holding up well lately such as metals & mining
and the energies are showing potential signs of topping (I know, less than a
week ago, I was recommending BUYS here!). Considering the above,
avoid new longs for now. Aggressive traders might want to watch for transitional
patterns (early trend) in the commodity related areas mentioned above.
As far as setups, Occidental Petroleum
(
OXY |
Quote |
Chart |
News |
PowerRating),
in the energies, looks like it has the potential to resume its recent slide out
of a First Thrust.
FYI
I have the recording to last Wednesday’s
audio/visual covering current conditions, trading through earnings, and position
management. Email me if you’d like a free link to this and/or the links for the
12 months (covering entries, stops,
position management, damage control, scanning, sector analysis etc…).
Best of luck with your trading on
Monday!
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
here for details.