Cautiously Optimistic
On Friday, the Nasdaq didn’t do much. It chopped
around but managed to end higher. This doesn’t mean that the day was
insignificant though. The fact that it did now follow through from
Thursday’s sell off, combined with the fact that the 200-day moving
average/the top of its breakout level held, is a positive.
The S&P stopped just short of its 50-day
moving average and managed to mount a minor reversal. Not the
most exciting reversal, but significant nonetheless.
So what do we do?
Based on the above, I’m cautiously optimistic. Therefore, look to
nibble on the long side.
Looking to potential
setups, Serena Software (SRNA),
mentioned Thursday night, still looks like it has the potential to
rally out of a pullback.
Cree Research (CREE),
mentioned recently, looks poised to rally out of a pullback. Also of
interest is the fact that it is now a low-volatility situation. For
more on trading volatility, see recent archives or my articles on the
subject under Traders Lessons.
One Thing I Do
Know
I was bummed about my
market call on Thursday,
but did find some solace in the fact that my money management example
worked so well. To review, I showed why it was important to lock in
quick profits (smoke ’em if you got ’em). Genesis Microchip (GNSS),
mentioned recently, provided a perfect example–giving back (b) all of
the prior two day’s gains (a) on Thursday. Now, wouldn’t you know it?
The stock skyrockets on Friday (c). I might not be able to pick the
direction of the market (and stocks) every single day, but there’s one
thing I do know. I know that they won’t always come right back.
Practice proper money management.
Best of luck with
your trading on Monday!
Dave
Landry
P.S. Reminder: Protective stops on
every trade!
*For those new to this column, the joke
flag is almost always flying.
Mathew M.
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