Bounce Over?
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.
On
Thursday, the Nasdaq lapped higher but was unable to hold its gains. This has it closing poorly for a solid trend day lower.
Thursday’s action suggests that
the bounce from lows is over and that the Nasdaq is poised to resume its strong
downtrend.
So what do we do? I would have preferred a deeper pullback
from lows which would have created a higher level to short from, but I guess
we’ll have to take what we can get. Focus on the short side but watch the
recent lows. If they fail to get taken out, you might want to tighten stops.
Also, keep in mind that Friday is triple witching. This could make for all sorts
of fun and games. If in doubt, stay out as this will only add to the recent
volatility.
Looking to potential setups, Sigma-Aldrich
(
SIAL |
Quote |
Chart |
News |
PowerRating),
mentioned recently, still looks like it has the potential to rally out of a
pullback.
Like the Nasdaq itself, there
are quite a few shorts that set up on the Pullbacks
Off Lows List:
Juniper Networks
(
JNPR |
Quote |
Chart |
News |
PowerRating) appears to be stalling out in
a simple three-bar pullback from lows.
Barr Labs
(
BRL |
Quote |
Chart |
News |
PowerRating) appears to be stalling out in the area
of its recent breakdown (a). Also, this one looks like it has a little further
to drop the some of the other shallower pullbacks. In other words, the distance
from its pullback to the recent lows (b) is larger.
EMC Corp.
(
EMC |
Quote |
Chart |
News |
PowerRating) also
appears to be stalling out in the area of its recent breakdown.
Best
of luck with your trading on Friday!
P.S. Reminder:
Protective stops on every trade!
“Love the
book….Simple IS better.”
Harlan S.
No risk, 30-day, money
back guarantee.