Too Soon To Celebrate
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.
On
Thursday, the Nasdaq lapped lower and after a brief blip up, it looked
like it was continuing its longer-term downtrend–losing nearly 2% form its
early morning high.
Then, it turned around and rallied for a solid trend day higher.
2000 still looks
like a likely resistance level. And, it looks like we’ll know for sure soon.
The Vix imploded on Thursday and is now getting stretched
to the downside from its 10-day moving average. Also, the three-day average of
the NYSE TRIN is approaching 30-day plus lows. This action suggests the market
is getting overbought on a short-term basis.
Once again, everyone is still
celebrating the bottom. Me? I’m still not so sure. I admit Thursday’s reversal
is impressive. But I still need more evidence. I’m willing to wait until the
Nasdaq rises above its 50-day moving average and stabilizes. And, at the rate
they are coming together, that shouldn’t be too long. For now, I still think
there will be opportunities on both sides of the market. However, if we are in
transition mode, it could be bumpy. Therefore, I see no reason to bet the farm
on either side. So keep it light or stay out until the picture clears.
Looking to potential setups, this is one of those nights
where I find myself not really excited about the markets. My legal pad that I
doodle on while flipping through hundreds of charts is mostly blank. In the
past, this has been a good indicator of when to trade and when not to trade.
If you’re looking to make a watch list for the long side, there are some stocks showing some really nice relative strength on
the momentum lists (Proprietary
Momentum List, New
60-day Highs on Double-Volume List, Momentum
10 Technology List etc.) These stocks are somewhat extended and not set up
but may be worthy on their next pullbacks.
On the short side, Baker Hughes
(
BHI |
Quote |
Chart |
News |
PowerRating), mentioned
recently, appears to be resuming its downtrend.
Bausch & Lomb
(
BOL |
Quote |
Chart |
News |
PowerRating), on the Proprietary
Implosion List, looks poised to resume its strong downtrend out of a
pullback from lows.
Reminder
Just a little over a week left
until Tony‘s
seminar. Today is the last day to sign up and save $250. I hope to see you
there!
Best
of luck with your trading on Monday!
P.S. Reminder:
Protective stops on every trade!
P.P.S. Enjoy your market holiday!
“…You have definitely developed some very clear and concise methodologies,
which can be used in the real world of trading…..”
Randy B.
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