Deja’ Vu All Over Again
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.
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On
Tuesday, it was deja’ vu all over again: the Nasdaq lapped higher on the open
(a) then sold off to close poorly (b). This action takes out the August lows
(c).Â
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Obviously, we remain way oversold.
However, that doesn’t mean we can’t go lower. What concerns me is that a)
there is no support for this market until 3,000 (d), and b) there
are no typical signs that occur during a market bottom such as a spike in the
VIX indicator or a spike in the three-day average of the TRIN (see A Trader’s
Nightly Regimen for more details on this).
Looking
to potential setups, Dynergy
(
DYN |
Quote |
Chart |
News |
PowerRating), on the Pullbacks
Off Highs List, looks like it has the potential to resume its uptrend out of
a three-bar pullback.Â
For you breakout players, Sungard Data Systems
(
SDS |
Quote |
Chart |
News |
PowerRating), on the  New
60-day Highs on Double-Volume List, broke to new highs out of a high level
six-day consolidation.Â
On the short side, Western Wireless Corp.
(
WWCA |
Quote |
Chart |
News |
PowerRating),
in the weak telecom
(
$XTC.X |
Quote |
Chart |
News |
PowerRating) and on the Pullbacks
Off Lows List, looks poised to resume its downtrend.
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Continuing
on the short side, Sprint PCS
(
PCS |
Quote |
Chart |
News |
PowerRating) mentioned Monday night, appears
to be resuming its downtrend. And Northern Telecom
(
NT |
Quote |
Chart |
News |
PowerRating) looks poised to make
another stair-step lower.
Best
of luck with your trading on Wednesday!
face=”Arial, Helvetica”>Dave Landry
P.S. Reminder:
Protective stops on every trade!