A Perverse Creature
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.
face=”Arial, Helvetica”>Join me, fellow TradingMarkets.com
content providers, and other traders and money managers at
the Trading Markets 2000 conference at the Venetian Hotel
Resort and Casino in Las Vegas on October 13-15, 2000.
At
the time this is being published, the Globex S&P futures
are trading 1 point lower and the bond market is trading
down 4 ticks.
face=”Arial, Helvetica”>On Thursday, the Nasdaq lapped
higher, and except for a minor pullback, it rallied nicely
most of the morning. This rally was fueled by comments from
the Greenspan testimony (prepared long before he spoke). The
Nasdaq then backed and filled throughout the afternoon,
giving hope to both longs and shorts. However, going into
the close, the market firmed. This action has it closing
just near its high (a) — suggesting, for the first time in
a while, that traders were willing to take ’em home.
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face=”Arial, Helvetica”>The market is a perverse creature.
Its job is to go where it wants to go, with as few players
on board as possible. I’d bet that many of the short-term,
and quite a few of the intermediate-term, players were
knocked out over the past few days. Considering this, if the
market continues to rally, it will likely continue to rally
further as these players are drawn back into the market.
face=”Arial, Helvetica”>It looks like a swing move back to
4,300 may be in the cards over the next few days. Friday’s
close will be important.
So
what do we do? Thursday’s action sure makes it look like all
is well in the world. And maybe it is. However, Friday,
being an options-expiration day, could make things a little
dicey. For now, though, you can’t fight the tape. Focus on
the long side.
Looking
to potential setups, 3 Com
(
COMS |
Quote |
Chart |
News |
PowerRating), mentioned recently
and on the
From Highs List, began rallying out of a pullback on
Thursday (a).
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Interwoven
Technologies
(
IWOV |
Quote |
Chart |
News |
PowerRating), mentioned last night and also on
the
From Highs List, still looks like it has the potential
to resume its uptrend. However, wait for follow-though
(i.e., for it to take out the prior 1-2 bar highs), as it
failed to rally on Thursday.
For
you breakout players, Sanmina
(
SANM |
Quote |
Chart |
News |
PowerRating), mentioned
Wednesday night and on the
Momentum List, broke to new highs on an expansion of
range and decent volume on Thursday. Art Technology Group
(
ARTG |
Quote |
Chart |
News |
PowerRating),
on the
From Highs List, is just shy of an all-time closing high,
and it looks poised to take out its recent high (around
127).
Best
of luck with your trading on Friday!
face=”Arial, Helvetica”>Dave Landry
P.S. Reminder:
Protective stops on every trade!