Too Soon To Kiss
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
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the Trading Markets 2000 conference at the Venetian Hotel
Resort and Casino in Las Vegas on October 13-15, 2000.
face=”Arial, Helvetica”>Do you swing? Read my latest
article, “
Tenets Of Swing Trading.” As usual, your feedback
is welcome.
face=”Arial, Helvetica”>At the time this is being published,
the Globex S&P futures are trading 1.50 points higher
and the bond market is trading up 2 ticks.
face=”Arial, Helvetica”>On Monday, the Nasdaq lapped higher
in a fake-out move and then sold off. After coming close to
the 3,600 level — a level well watched on account of the
prior gap in that area (a) — it reversed and began to
rally. It chopped around all afternoon but strengthened
going into the close.
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Monday’s action breaks the Nasdaq’s free fall. However,
let’s not start kissing each other just yet.*
face=”Arial, Helvetica”>Based on my unofficial survey of
money managers and large traders, there are quite a few
people out there who are very long and looking to exit on
rallies. Therefore, I would assume there is supply waiting
in the wings.
face=”Arial, Helvetica”>So what do we do? Monday’s rally
sets up some decent shorts. On these, enter only if you get
follow-through to the downside (just in case this dead cat
can bounce for more than a day). On the long side, take home
only your winners — and consider hedging those.
Looking
to potential setups, Tut Systems
(
TUTS |
Quote |
Chart |
News |
PowerRating), mentioned
Friday night and on the
From Highs List, still looks interesting to me.
PeopleSoft
(
PSFT |
Quote |
Chart |
News |
PowerRating), also on the
From Highs List, formed a bullish outside day in a
pullback (a), and it looks poised to challenge its recent
highs (around 24). Lehman Brothers
(
LEH |
Quote |
Chart |
News |
PowerRating), on the same
list, is a two-step pullback.
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On
the short side, LSI Logic
(
LSI |
Quote |
Chart |
News |
PowerRating), in the weak (not
counting Monday!) semis
(
$SOX.X |
Quote |
Chart |
News |
PowerRating) and on the
From Lows List, looks poised to resume its meltdown.
National Semi
(
NSM |
Quote |
Chart |
News |
PowerRating), on the
10 Technology List, is in day two of a pullback from
lows and looks poised to resume its downtrend. Note: If you
get bored tonight, pull up a weekly and monthly on these —
not a pretty picture.
Continuing
on the short side: In the vulnerable major oils
(
$XOI.X |
Quote |
Chart |
News |
PowerRating),
Chevron
(
CHV |
Quote |
Chart |
News |
PowerRating) and Burlington Resources
(
BR |
Quote |
Chart |
News |
PowerRating),
mentioned Friday, appear to be resuming their downtrends.
Best
of luck with your trading on Tuesday!
face=”Arial, Helvetica”>Dave Landry
P.S. Reminder:
Protective stops on every trade!
*Isn’t that a line
from Pulp Fiction?