Correction Continues
On Monday, the Nasdaq opened slightly higher but quickly
reversed and sold off hard. Then, after some mid-day drifting, it resumed its sell
off. This action has it closing poorly and well below its 50- and 200-day moving
averages.
The S&P also sold off hard. This action puts it back to
the area of its 50-day moving average.
So what do we do? Monday’s action confirms that the market
is correcting (duh!). The VIX rose but still remains at historically low levels.
The combination of these two suggests that we will have additional downside.
Therefore, look to play both sides, but on the long side, stick with issues that
can trade contra to the overall market. The oils and oil services are what I had
in mind here.
Looking to potential setups, the Oil Service Holders
(
OIH |
Quote |
Chart |
News |
PowerRating) look like they have the potential to rally out of a pullback. BTW, if
you are looking for setups in individual issues in the oils/oil services,
tonight’s Pullback
list has quite a few.
No Tickee, No Tradee
Newell
(
NWL |
Quote |
Chart |
News |
PowerRating), mentioned Friday, got creamed on Monday.
However, it came nowhere near a potential trigger point (a). Always wait for
entries.
Best of luck with
your trading on Tuesday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
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