Alive And Well
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.
face=”Arial, Helvetica”>For a back-to-basics look at
retracement levels, see my latest trading lesson,
Introduction To Retracements.
At
the time this is being published, the S&P Globex futures
are trading 5.60 points lower and the bond market is trading
down 1 tick.
Another
choppy day in Tech Land as the Nasdaq open lower, rallied,
reversed, and bounced (slightly).
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Once
again, the “under-the-hood” action was a little
better than the overall index suggests. Sure, there were
some big losers here and there, but there were just as many
big winners — suggesting that speculation is alive and
well.
On another positive note, internals, such as
advance/decline, continued higher. On the last point, after
the close, Yahoo!
(
YHOO |
Quote |
Chart |
News |
PowerRating) announced better-than-expected
earnings and was trading more than 15 points higher in early
after-hours trading. This might be the shot in the arm that
the market needs to get going.
At
the risk of being clichéd, it looks like a market of stocks
and not a stock market. In other words, focus on the best
setups in this environment and not on the overall indices —
for now.
Looking
to potential setups, Cell Therapeutics
(
CTIC |
Quote |
Chart |
News |
PowerRating),
mentioned recently and the
From Highs List, sold off earlier on Tuesday (a), but
reversed to close well (b). This action may have shaken out
the weak hands and could clear the way for the stock to
resume its uptrend.
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Volatility
is cyclical in nature. Periods of low volatility tend to
follow periods of high volatility, and vice versa. Stocks
(and commodities) that exhibit low volatility often have
large price moves (in either direction) over the next few
days as volatility reverts to its mean. Whenever faced with
a low-volatility situation, I like to put together some sort
of technical picture to help determine which way price will
move. With that said, 3 Com
(
COMS |
Quote |
Chart |
News |
PowerRating), on the
Explosions List, is a low-volatility situation (a) that
looks poised to resume its strong uptrend and to rally out
of a pullback (b).
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Continuing
on the pullback theme, Charter Power Systems
(
CHP |
Quote |
Chart |
News |
PowerRating),
mentioned Monday night, still looks interesting to me.
On
the short side, General Motors
(
GM |
Quote |
Chart |
News |
PowerRating), on the
From Lows List, looks poised to resume its strong
downtrend.
Best
of luck with your trading on Wednesday!
face=”Arial, Helvetica”>Dave Landry
P.S. Reminder:
Protective stops on every trade!
P.P.S. Add
“soft landing” to my “Elian” list. Darn,
I said Elian again. I did it again! This reminds me of the
knights that say “ne” — not to be confused with
the ones that go “ipi-tipi-tacki-haccck.”