Back To Blue Arrow Trading?
On Thursday, the Nasdaq opened lower and chopped around.
Then, early in the afternoon, it began to sell off. This selling lasted into the
close and has the index closing poorly.
The S&P also sold off to close poorly.
So what do we do? Well, I expected more of a bounce
(recently) but, as you know, the market doesn’t always give you what you expect.
Thursday’s action suggests the big blue arrows are still working but does leave
us oversold. And, as you also know, this creates a “damned if you do and damned
if you don’t” situation. If you try to establish new shorts, the market
will bounce. If you try to buy, oversold will become more oversold. Therefore,
probably the best thing to do is to continue to scale out and/or trail a stop on
existing shorts. For new positions (shorts), focus on issues that are in deeper
pullbacks (i.e., those that are not oversold like the market itself) and/or
commodity related stocks such as the oils/oil services that can trade contra to
the overall market.
Looking to potential setups, Baker Hughes
(
BHI |
Quote |
Chart |
News |
PowerRating), in the
weak oil service sector
(
$OSX.X |
Quote |
Chart |
News |
PowerRating), looks poised to resume its downtrend
out of a pullback from lows.
Best of luck with
your trading on Friday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
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