Mixed Signals
On Wednesday, the Nasdaq opened soft
but found its low
fairly quickly and began to rally. However, it found its high by mid-day and
gave back most of its gains. Then, late in the day, it began to rally once
again. This action has it closing fairly well and keeps it above its recent
trading range.
The S&P put in a similar performance but continued to under-perform the Nasdaq. Watch to see if it will take out the bottom of its trading
range.
So what do we do? I’m encouraged by the action in the
Nasdaq even though it was a bit bumpy intraday. However, as implied above, the
S&P looks like it has the potential to roll over. I’d keep an eye on both
indices. I’m not so sure that one can rally without the other, at least not for
long. Therefore, based on the above,
continue to keep it light until we either see continuation to the upside or a
break down below the trading range.
Looking to potential setups, the HMOs and Hospitals still
look poised to resume their meltdown.
Considering the above, Community Health Systems
(
CYH |
Quote |
Chart |
News |
PowerRating),
mentioned Tuesday night, tailed higher on Wednesday but reversed to close
poorly. This action suggests that it still has the potential to resume its
meltdown out of an Explosion Gap Pivot (see last night’s commentary for more
details). Note: Since the pattern entry is a ways away (b), more aggressive
traders may want to consider a higher entry (a).
Best of luck with
your trading on Thursday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
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