A Bunch Of Nickels

  • September 26, 2001
  • Dave Landry

 

On Wednesday, the Nasdaq opened slightly higher and after a
brief blip up, sold off hard for a solid trend day lower. This action has it
closing poorly and suggests the recent lows will be challenged.

 

The S&P held up better than
the Nasdaq but is also in a vulnerable position. It remains set up as a pullback
from lows.

 

So what do we do? The indices
and nearly all sectors are now setup as pullbacks from lows. As I look to
individual stocks, if I had a nickel for every short setup, well, I’d have a
bunch of nickels. It’s almost too pat. Therefore, continue to focus on the short
side but remember that we remain in an event driven environment. So, keep it
light.

Looking to potential setups, on the short side, Medtronic (MDT),
mentioned Tuesday night, still looks vulnerable.

Comerica (CMA),
in weak bank sector, is set up as a pullback from lows. Many other banks have
formed similar patterns. Take your pick. 

 

Computer Discount Warehouse (CDWC),
like the retail sector itself, looks poised to resume its downtrend out of a
pullback from lows.

Question

I missed a short setup on
Wednesday (which later turned into a big winner) because I used a limit order to
enter. Do you use limit orders?

Answer

In general, no.*
I NEVER use a limit order to enter a position. I use mostly market orders when
the setup triggers. If the setup does not trigger shortly after the open and I
still like the setup, I might put in a stop order (not a stop limit!) to enter
the position (so I don’t have to watch the screen all day). My reasoning is that
I’d rather have a  s**ty (rhymes with Smitty) fill on a stock that moves
sharply in the intended direction than sit on the sidelines and think “shoulda,
coulda, woulda”.

Best of luck with your trading
on Thursday!

Dave Landry

sentivetradingco@prodigy.net

P.S. Reminder: Protective stops on every trade!

P.P.S.
I look forward
to meeting you in
about week at TM2001.
Don’t hesitate to register, because in addition to showing you every
important variation on pullback setups, I’ll also be teaching you my
favorite new techniques including: how to capture trends before the crowd
using “transition in trend” patterns
and how to ride huge momentum off false moves…both
to the long and short side.

*Limit orders are good for taking partial profits
on existing positions, especially in choppy markets.

“…Your
book was the best. I’ve read dozens of stock market books but when I finished
yours, something clicked. Thanks for writing it and your column and I’ll see you
in Vegas….”

Regards,

Dave (aspiring trend following moron) 

 

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