Blind Squirrel
On Friday, the Nasdaq opened weaker and sold off hard. It
did bounce late in the day but sold off again going into the close. This action
has it closing poorly and suggests that its recent lows (at least) will be
tested.
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The S&P also sold off hard out of a pullback from lows.
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So what do we do? Based on Friday’s follow through and
continued poor sector action, I still think we have some additional
downside–possibly the recent lows. Therefore, continue to focus on the
short side.
Looking to potential setups, Secure Computing (SCUR)
in the weak software sector, looks poised to continue its downtrend out of a
pullback/inverted cup and handle.
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Walk Through Continued
Recently, I had discussed that breakeven plus would be a
good place for a stop (after taking partial profits) on Coach Inc. (COH)
(see archives for more details). This way, barring overnight gaps, the worst you
could do was breakeven on the remaining shares. And, this allowed for a
potential “home run” on those shares. Let’s assume for educational
purposes that this stop still stands (a).
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Thanks!
Thanks for the kind works about last night’s commentary.
How did I know? Well, even a blind squirrel occasionally finds a nut. Seriously,
I did not “know.” You never know for sure. What I did know is that
statistically* there was a better-than-average chance that the market would head
lower based on the (fully disclosed) systems that I follow. This combined with a
pullback from lows setting up in the indices and a negative news environment
made a great recipe for market weakness.
Other
I was unaware until after the fact that they were not
videoing my Trading Markets 2001 presentation. However, I noticed that someone
there was making a personal copy. I would love a copy for my own viewing (I’ll
explain in further detail why if you contact me). I would be happy to pay any
costs incurred to duplicate/ship the tape (and throw in a book and one
year of my trading service for your troubles). Please contact me via email
if you have this or might know who does. Thanks!
Best of luck with your trading
on Friday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
*As I preach, “Statistics are worthless,
75% of all people know that” (Homer Simpson)
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“……passing
on Dave Landry on Swing Trading because of its price tag would be a mistake.
It’s a detailed and understandable trading strategy book…..”
Active Trader
Magazine, February
2002 issue.
No risk, 30-day, money
back guarantee.