Ain’t No Cure For The Summertime Blues?
On Tuesday, the Nasdaq lapped higher but immediately began
to sell off. It found its low late in the morning and then chopped its way
higher for the rest of the day. However, this wasn’t enough to get it back into
the plus column.
The S&P sold off harder on a relative basis.
So what do we do? The trend obviously still remains down
but we are somewhat oversold and the volume remains extremely light.Â
Although the fact that the market is “falling on its own weight” is a
negative, I hate to draw any conclusions until everyone gets finished with their
extended weekend. So keep it light in this thin and choppy environment. On
the short side, stick with those issues whose sectors remain in strong
downtrends. On the long side, stick with issues whose sectors are in strong
uptrends and can trade contra to the indices. At this time, gold/silver is the
only sector that fits this bill. Â
Amex Gold and Silver Index
Looking to potential setups, Apex Silver Mines
(
SIL |
Quote |
Chart |
News |
PowerRating) is
in its first pullback since its impressive base breakout.
Schering Plough
(
SGP |
Quote |
Chart |
News |
PowerRating),
mentioned recently and in the weak drugs, still looks poised to continue its
downtrend out of a Trend Pivot
Pullback.Â
Summertime Blues?
Friday was the lightest volume day of the
year and Tuesday was the second lightest (or third basis the NYSE). Hopefully,
this does not foretell what’s to come. Unfortunately though, with Memorial
Day behind us, summer is unofficially here. And summers are notorious for being thin and
choppy–two of the biggest
enemies of the momentum swing trader. Therefore, proceed with caution over the
next few months. Remember, as a private trader you are not held to a
quarterly report. Stay conservative until we see what the summer brings.
Best of luck with
your trading on Wednesday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
“….Feel free to quote me, the book is fantastic. It is written for traders who want to know the real basis of
successful trading. No glory stuff. No hero tales. Plain old sound advice which is a rare commodity in this business……”
Mike M.
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