Academic At Best
On Tuesday, the Nasdaq opened weaker and chopped its way
sideways to lower for most of the day. Then, in mid-afternoon, it gained footing
and rallied to close well. The fact that Monday’s gap was tested and
“held” is a positive.
The S&P also closed well and in the plus column after
chopping around. This action keeps it above its recent trading range.
So what do we do? The market remains overbought but the
action in the indices remains positive. However, with election results and a Fed
meeting looming, any talk about market direction is academic at best. Probably
the best thing to do is to avoid new positions, honor your stops and be willing
to take profits quickly, should the market move sharply in favor of existing
positions.
No setups tonight. Health care plans (HMOs) continued to
melt down and could set up soon. Also, there are many stocks in persistent uptrends
from lows. These include stocks in telecom, the semis (e.g., Qlogic), software
and Internet.
Best of luck with
your trading on Wednesday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
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