Important Level To Hold
On Friday, the Nasdaq opened weak, rallied and then sold
off. It did chop higher in the afternoon but this wasn’t enough to keep if from
closing poorly.
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The S&P also sold off. What’s interesting is that it
appears to be stalling after pulling back into a topping formation. It’s
important for this level to hold, otherwise it could make another leg lower.
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So what do we do? When you combine the above poor index
action with low VIX readings it suggests that the market is vulnerable.
Therefore, look to play the short side but keep it light since the market
remains choppy.
Looking to potential setups, although the biotechs in
general were up on Friday, this action looks like nothing more than a pullback
from lows. Abgenix (ABGX),
our old friend, looks like it is setting up for yet another stair-step lower.
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Best of luck with your trading
on Monday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
“….Landry
writes clear, lucid prose, and uses lots of examples. I like this book because
of Landry’s simple approach. He shows many useful trading ideas instead of
trading theory….. It’s a good introduction for a novice trader…..”
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