Fast Money Gone
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
market’s opening. Therefore, overnight events may alter the
outcome of these observations.
On Monday, after a choppy start, the Nasdaq rallied higher but found high late
in the morning and was unable to take out Friday’s high. The index then slid for
most of the day until a late-day rally. However, this wasn’t enough to get the index
positive or above its open.
Monday’s action forms an inside day. Not a day of huge significance, but it
does set up Friday’s high (a) as minor resistance. Also, so far this looks like
nothing more than a pullback from lows. This suggests a trade back to the old lows is still
in the cards.
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So what do we do? I still see no reason to get too bullish at this juncture. It seems that the
“fast money” I spoke about on Friday was hard to find today. With that said,
stick with the more defensive issues on the upside and continue to look to short
the speculative issues on the downside.
Looking
to potential setups, Tenet Healthcare
(
THC |
Quote |
Chart |
News |
PowerRating), on the Pullbacks
Off Highs List, stabbed lower earlier in the day but reversed to close
fairly well. This suggests that it is poised to resume its uptrend out of a
four-bar pullback.
Continuing on the pullback theme, Entergy
(
ETR |
Quote |
Chart |
News |
PowerRating) and Exxon/Mobil
(
XOM |
Quote |
Chart |
News |
PowerRating), both mentioned Friday night, still look
like they have potential.
On the short side, the Technology Holders
(
XLK |
Quote |
Chart |
News |
PowerRating)
may be a way to participate in any continued tech weakness. Like the Nasdaq
itself, they too appear to be stalling out near recent resistance(a).
Continuing on the short side, Level 3 Communications
(
LVLT |
Quote |
Chart |
News |
PowerRating), mentioned last night, continues to consolidate at lower levels and
looks poised challenge its old lows.
Natural Microsystems
(
NMSS |
Quote |
Chart |
News |
PowerRating) looks poised
to resume its strong downtrend out of a four-bar pullback from lows.
Morgan Stanley Dean Witter
(
MWD |
Quote |
Chart |
News |
PowerRating), on the Pullbacks
Off Lows List, closed poorly after lapping higher earlier in the day
(Monday). This suggests its strong downtrend remains intact.
Best
of luck with your trading on Tuesday!
face=”Arial, Helvetica”>Dave Landry
P.S. Reminder:
Protective stops on every trade!