Closer
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.
On
Tuesday, the Nasdaq lapped slightly lower (a) and proceeded to sell off. A late
day bounce was hit with eager sellers going into the close as it appeared that
no one wanted to take ’em home. This action has the index closing poorly (b) and
down near the prior congestion area (c).
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Tuesday’s action brings us one step closer to the June
lows (d). As mentioned recently, a heavy volume
shakeout below this level might be just what the market needs before it can
begin its rebuilding process.
On a
slightly positive note, the VIX is beginning to get stretched (a) as evidenced
by a CVR III and CVR VI buy signal on the Market
Bias Page. It’s nowhere near the levels associated with major bottoms (b),
but high enough to suggest that we could get a tradable bounce over the next few
days.
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So what do we do? Way oversold, became way way
oversold on Tuesday. However, this doesn’t mean that we can’t go even lower.
Therefore, continue to remain cautious regardless of what side you play.
Looking
to potential setups, Perkin Elmer
(
PKI |
Quote |
Chart |
News |
PowerRating), on the Pullbacks
Off Highs List, began rallying out of a deep pullback on Tuesday.
Continuing on the pullback theme, Dura
Pharmaceuticals
(
DURA |
Quote |
Chart |
News |
PowerRating), on the Momentum
10 Technology List, looks poised to resume its strong uptrend out of a
shallow pullback. And PP&L Resources
(
PPL |
Quote |
Chart |
News |
PowerRating), on the Pullbacks
Off Highs List, is a Trend Pivot Pullback.
On the short side, Getty Images
(
GETY |
Quote |
Chart |
News |
PowerRating), on the Pullbacks
Off Lows List, looks poised to resume its strong downtrend.
Best
of luck with your trading on Wednesday!
face=”Arial, Helvetica”>Dave Landry
P.S. Reminder:
Protective stops on every trade!
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