Bounce Or Blue Arrows? (Part 2)
On Friday, the Nasdaq gapped sharply lower but quickly
found its low. It then rallied for nice trend day higher (for the most part).
The S&P also rallied nicely from its early morning
lows.
So what do we do? Well, judging from the Market Bias
signals and Friday’s action, it looks like we have another shot at catching a
bounce. However, I find it hard to get too bullish when you consider the
direction of the big blue arrows (explained below). Therefore, if you are nimble
(e.g., daytrader) you might look to play a continuation in Friday’s
turnaround in the index shares, provided of course: a) they do continue and
b) it doesn’t gap higher on Monday. For everyone else, I think the
prudent thing to do would be to start looking for short candidates for after the
bounce.
Due to a lack of meaningful setups, I am not showing any
picks tonight (Friday). As implied above, we should have a plethora of shorts
setting up after the next bounce. Remain patient.
Big Blue Arrows Explained
Today I was asked to explain my blue arrows.
“Blue” has no significance whatsoever. It’s just simply the default
color for the draw feature in my paint program. However, the direction the arrow
is of importance. An arrow whose right side is higher than the left signifies an
uptrend. An arrow in whose right side is lower than the left signifies a
downtrend. This is illustrated below.
Best of luck with
your trading on Monday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
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