Bounce Without Tech?
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
market’s opening. Therefore, overnight events may alter the
outcome of these observations.
Welcome aboard Goran!!
On
Thursday, the Nasdaq lapped lower (a) on the open and after chopping around a
bit, mounted a decent rally. However, the rally fizzled and the index ended
up back near its open.
It’s somewhat disappointing that the rally didn’t hold but,
based on recent performance, I suppose we’ll score this day as a minor positive.
After all, it closed up 7 points!
On the bright side, the Vix reversed (a) after hitting
fresh highs. This action adds several buy signals to the Market
Bias Page and suggests that there may be a bounce play from lows. However,
you might want to stay away from tech as it can’t seem to get out of its own way
as of late. As my friend Goran pointed out in his Markets
in Motion column: “We haven’t seen three straight up days (in the
Nasdaq) since Labor Day.”
Looking to potential
setups, our old friend Toll Bothers
(
TOL |
Quote |
Chart |
News |
PowerRating), mentioned recently, has set up as
a “two-step” pullback.
Stocks in fast moves
often form shallow pullbacks and only pause a few days before resuming their
uptrends. With that said, Countrywide Credit
(
CCR |
Quote |
Chart |
News |
PowerRating), mentioned Wednesday
night and on the Proprietary
Momentum List, is in day two of a shallow pullback from highs.
Stocks that form deep pullbacks tend to have more of a
shorter-lived, “knee jerk” reaction. With that said, Neuberger Berman
(
NEU |
Quote |
Chart |
News |
PowerRating), mentioned recently, began rallying out of a deep pullback on
Thursday. This action could shake out nervous shorts and draw back in longs that
were stopped out.
On the short side,
Abbot Labs
(
ABT |
Quote |
Chart |
News |
PowerRating), on the Pullbacks
Off Lows List, appears poised to resume its rollover from a big-picture
topping formation.
Best
of luck with your trading on Friday!Â
face=”Arial, Helvetica”>Dave Landry
P.S. Reminder:
Protective stops on every trade!
P.P.S. If all goes as planned, the
book should ship within the next week to ten days. Shameless marketing: Only a
few days left to take advantage of the pre-publication 20% off special.
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