Near End of This Corrective Move?
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.
At the time this is being published, the S&P Globex Futures are trading 6.40 points lower and the bond market is trading up 6 ticks.
Tonight, we have five indicators pointing higher on the Market Bias Page. This, combined with the fact that the 3 day moving average of the NYSE TRIN is at its highest level (a) since the day before the 10/18/1999 bottom (b) suggests that we may be near the end of this corrective move. Should you run out and buy buy buy? NO, but it might be a golden opportunity to wait for some follow through to the upside (notice above that the Globex S&P futures are trading lower) and begin nibbling.
The Biotechs [BTK.X>BTK.X] (let me know if you’re tired of hearing about them), sold off earlier today (a) but recovered to close well (b). This suggests that their corrective move may be over. Look for buying opportunities in stocks in the sector with similar patterns.
On the Pullback List, there are three 3-bar pullbacks that look very interesting to me tonight: Home Depot [HD>HD], AES Corp. [AES>AES] and Analog Devices [ADI>ADI].
Nanogen [NGEN>NGEN], mentioned last night, still looks interesting to me.
As you know, the Trading Where The Action Is List contains the most volatile stocks and is only for the most aggressive traders who are willing to assume a higher degree of risk in order to capture larger gains.
With that said, Intraware [ITRA>ITRA], mentioned last night, still looks interesting to me.
For you breakout players, Alcan Aluminum [AL>AL], on the Proprietary Momentum List and in the recently strong cyclicals, broke to new highs on an expansion of range and volume today.
On the short side, two stocks look interesting to me tonight: 4 Kids Enterainment [KIDE>KIDE] looks poised to continue its strong downtrend and THQ Inc. [THQI>THQI] sold off sharply today and looks poised to challenge its old lows.
Best of luck with your trading on Thursday!
PS – Reminder: Protective stops on every trade!