Ahead Of The Fed
Each evening we focus
on the most interesting aspects for the upcoming trading
day. The comments are based on observations of the nightly
updates of the Stocks/Sectors and Market Bias pages. They
are provided for educational purposes only and are not
intended to be direct trading advice. Also, keep in mind
that these remarks are made up to 12 hours in advance of the
markets opening. Therefore, overnight events may alter the
outcome of these observations.
face=”Arial, Helvetica”>Join me, fellow TradingMarkets.com
content providers, and other traders and money managers at
the Trading Markets 2000 conference at the Venetian Hotel
Resort and Casino in Las Vegas on October 13-15, 2000.
my latest trading lesson.
At the time this
is being published, the Globex S&P futures are trading
down 0.30 points and the bond market is trading down 1 tick.
face=”Arial, Helvetica”>On Monday, the Nasdaq had a decent
lap higher (A) but failed to have much follow-through,
finding its high and drifting by late morning. Then, in the
early afternoon, it began to sell off. It was able to
recover to its near opening levels late in the day, in what
looked a lot like a short-covering rally in front of the
Fed.
face=”Arial, Helvetica”>It looks like the psychological
4,000 level may provide some resistance to the upside.
width=”470″ height=”320″>
face=”Arial, Helvetica”>As mentioned recently in my
Market Outlook, the VIX remains at its lowest levels of
the year. This doesn’t mean that the market will
reverse (immediately); it just means that the market has the
potential to reverse. Keep this in mind when
initiating trades on the long side.
face=”Arial, Helvetica”>Looking to potential setups,
Providian
(
PVN |
Quote |
Chart |
News |
PowerRating), in the strong financials sector
(
$SPF.X |
Quote |
Chart |
News |
PowerRating)
and on the
From Highs List, gapped lower on the open on Monday (A)
but reversed to close well (B). This may have shaken out the
weak hands and suggests that its uptrend remains intact.
width=”470″ height=”320″>
face=”Arial, Helvetica”>Continuing on the pullback theme,
CIGNA Corp.
(
CI |
Quote |
Chart |
News |
PowerRating), in the strong financial/insurance
sector
(
$IUX.X |
Quote |
Chart |
News |
PowerRating) and also on the
From Highs List, sold off earlier in the day, but it
found support near its recent breakout/consolidation and
reversed to close well. This suggests that its uptrend
remains intact.
On
the short side, Xircom
(
XIRC |
Quote |
Chart |
News |
PowerRating), on the
From Lows List, is a four-bar pullback from lows and
looks poised to challenge those recent lows. Dell Computer
(
DELL |
Quote |
Chart |
News |
PowerRating),
on the same list, is a similar pattern in the five-bar
variety.
Best
of luck with your trading on Tuesday!
face=”Arial, Helvetica”>Dave Landry
P.S. Reminder:
Protective stops on every trade!