Corrective Action Resumes
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.
The Nasdaq lapped slightly lower on
Thursday’s open (a) but sold off to close poorly (b) after a brief blip up.
Closing nearly at the low suggests that we’re in for a few more days of
corrective action.
So what do we do?
Because the recent longs
are failing and because the VIX is reversing from relatively
low levels suggest that we should focus on the short side for a few days.
Looking to setups, BMC Software
(
BMCS |
Quote |
Chart |
News |
PowerRating), on
the Pullbacks
Off Highs List, looks like it has the potential to resume its melt up from
lows.
On the short side,
Genentech
(
DNA |
Quote |
Chart |
News |
PowerRating), on
the Pullbacks
Off Lows List, appears to be stalling out in its
rally from lows.
Macromedia
(
MACR |
Quote |
Chart |
News |
PowerRating), mentioned Wednesday
night and on the Pullbacks
Off Lows List, is in a low volatility situation
(I’ll explain this on Friday), which suggests that it might make a large move
down as volatility reverts to the mean.
Best
of luck with your trading on Friday!
P.S. Reminder:
Protective stops on every trade!
“I have read 100’s of books on trading over the
years and most are filled with fluff. Dave Landry On Swing Trading is all
meat.”
Thorne R.
No risk, 30-day, money
back guarantee.