After The Mother
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.
Finding setups is
fun, but that’s just one small part of trading. Check out my latest article on
what to do After
The Setup.
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can even pre-order my upcoming book on swing
trading at a 20% discount.
After
the mother-of-all reversals on Friday, one would have expected the market to
follow through today (Monday). Instead, the Nasdaq gapped higher (a) to what
turned out to be near the highest levels of the day. It then sold off and closed
poorly (b) for a solid trend day lower.
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So what
do we do? The lack of follow through is disappointing to say the least. I’d
remain skeptical until the market gives us some sort of a bottoming pattern or
until it can get back above the 50-day and 200-day and stabilize. With that
said, tread lightly on the long side and consider some shorts.
face=”Arial, Helvetica”>Looking to potential setups,
American General Corp.
(
AGC |
Quote |
Chart |
News |
PowerRating), mentioned
Friday night, began rallying out of a pullback on Monday.
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Astropower
(
APWR |
Quote |
Chart |
News |
PowerRating), on the Pullbacks
Off Highs List, appears to be finding support around 40. This suggests its
uptrend remains intact. Just wait for follow-through to the upside here as it
did close poorly on Monday.
On the short side, Sycamore Networks
(
SCMR |
Quote |
Chart |
News |
PowerRating),
on the Pullbacks
Off Lows List, gapped higher on today’s open but reversed to close
poorly. This suggests its strong downtrend remains intact.
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Continuing on the short side, Textron
(
TXT |
Quote |
Chart |
News |
PowerRating),
also on the Pullbacks
Off Lows List, looks poised to resume its downtrend out of a four-bar
pullback.
Best
of luck with your trading on Tuesday!
face=”Arial, Helvetica”>Dave Landry
P.S. Reminder:
Protective stops on every trade!