Why You Shouldn’t Listen To The Media
On Friday, the Nasdaq opened lower, but quickly bounced. It
made another stab lower before generally chopping its way higher for the rest of
the morning. It then drifted sideways to lower throughout the afternoon. This
action keeps it right at the 1320 support level. If this level is broken decisively,
the October lows remain a likely target.
The S&P put in a somewhat similar performance, but
managed to hang on to most of its gains. It remains below the 870
“breakdown” level. The October lows are a potential target here too.
For perspective, here are the monthly charts.
The S&P:
And the Nasdaq.
As you can see, the indices were down for the month.
Specifically, the Nasdaq lost 1.1%, the Dow lost 3.5% and the S&P lost 2.74%
Let’s look at what I wrote on January
3, 2003:
“The media continues to
celebrate as if the year is over. Yes, statistically, the market that starts
with an up January finishes the year higher. However, number one, January ain’t
over yet. And number two, ‘statistics are worthless, 75% of all people know
that.'”
The point is not to gloat. As longer-term readers of this
column know, I will NEVER tell you “I told you so.” I know that as
soon as I get cocky, I’m dead. However, tonight I couldn’t resist because as a
teaching column, there is something to be learned here. The lesson: don’t get
caught up in the euphoria of the market and/or the media. Take it day by day.
Believe in what you see and not in what you believe.
So what do we do? The path of least resistance still
appears to remain down. However, the lack of follow through lately has been
frustrating. Therefore, continue to focus on the short side but keep it light.
Looking to potential setups, Scios
(
SCIO |
Quote |
Chart |
News |
PowerRating), in weak
drugs, looks poised to resume its meltdown out of a First Thrust.
Best of luck with your trading on Monday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
“….I keep pushing people to get it and read it. I like you and all, but that’s not why I do it. I really feel you’ve written an accessible, usable text that the average guy can read, learn and master with daily practice. No esoteric models or complicated formulas that require obscure and hard to get data. I know you’re hearing that a lot. But I think you’ll look back years from now and feel proud to know it’s sitting on the shelf of some very successful investors……”
Name withheld
