3 Things You Should be Doing in this Market
Dave Landry is principal of Sentive Trading, a money management firm, and a
principal of Harvest Capital Management. Mr. Landry is the author of two top
selling books,
>Dave Landry’s 10 Best Swing Trader Patterns And Strategies and
>Dave Landry On Swing Trading.
If you would like a free trial to Dave’s Nightly Swing Trading Alerts Report
On Friday, the Nasdaq gapped lower but found its low fairly early. It
then began to trade higher in a choppy fashion. However, it found its high in
early afternoon trading and generally worked its way lower for the remainder of
the day. This action puts it below its 50-day moving average. Â Â
The S&P put in a somewhat similar performance. It too is now below its
50-day moving average. Â
So What Do We Do? The indices continue to drop from their recent
Gatekeeper-like pattern (i.e. .786 retracement, email if you need the
rules/detailed explanation). This action is concerning. When the market becomes
questionable like this, there are only a few things to do: 1) honor your
stops on existing longs, 2) do not initiate new longs unless they are in
commodity related areas -OR- (to a lesser extent) in areas that you feel are so
strong that they can buck the overall market 3) begin watching for transitional
(i.e. early/ new trend) shorts. As far as commodity related areas
metals & mining and the golds are pulling back from their strong uptrends.
Therefore, begin looking for new opportunities here. On the short side, I’m not
seeing many meaningful setups just yet. I would imagine on continued weakness
followed by a slight bounce, we would begin seeing a plethora of setups. For
now, remain patient here.
As far as setups, Nucor
(
NUE |
Quote |
Chart |
News |
PowerRating), in the strong steels (and let’s
face it, what good is weak steel?) looks poised to resume its uptrend out of its
first pullback since a base breakout. It is also a pattern I call a Trend
Pivot/Second Entry Pullback–email me if you need the rules.Â
Bat Man Has Spoken
Critics have called last Wednesday’s A/V presentation the “goofiest
ever.” In it, I covered current market conditions and money/position
management examples. Further, I did some poor imitations of a popular TV host, Arnold
imitations, spilled some coffee, made quite a few comments that were not
politically correct–including a few Brokeback Mountain jokes (not that there’s
anything wrong with that!). Click
here to view it or Email me if you need a link to this and prior
presentations covering a plethora of topics.Â
Best of luck with your trading on Monday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
P.P.S. If you would like a free
trial to my trading service, click
here.
Â