Market Bias Pointing Lower
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.
Tonight we have 3 indicators pointing lower on the Market Bias Page. Although this is a negative for the market, don’t be a hero. Jumping in front of a freight train is a bad idea. Just keep this bias in the back of your head and IF the market begins to turn you might want to look to get short.
On the Pullbacks List, New Era of Networks [NEON>NEON] has formed a pennant and looks poised to resume its breakout. Clearnet Communications [CLNTF>CLNTF] is a pattern I call a “Running Cup and Handleâ€. This is where a cup forms that remains at or above the 50-day moving average. This combines momentum with a bottoming pattern-the best of both worlds.
Tonight, we updated our Cup and Handle List. Metamor Worldwide [MMWW>MMWW] has formed a big picture complex inverted head and shoulders pattern as its cup. In English, it looks like a potential bottom has been put in.
For you breakout players, Prodigy Communications [PRGY>PRGY], on the New 60-day Highs on Double-Volume List, broke to new highs on an expansion of range out of a consolidation today. Voice Stream Wireless [VSTR>VSTR], mentioned last night as a Pullback, broke to new highs on an expansion of range today. If you’re not comfortable with the extreme volatility here, wait for the next pullback before attempting an entry.
On the short side, Etoys [ETYS>ETYS], on the Below 50-DEMA-DV List, appears to be breaking down out of big picture falling double tops.
Best of luck with your trading on Monday!
Dave Landry
PS – Reminder: Protective stops on every trade!