Dip A Toe In?
On Thursday, the Nasdaq gapped lower and headed
lower but quickly found its low. Then, after much chopping and
drifting, mounted a decent come-back rally.
The fact that the index hit 4-month lows and
reversed to close on its high is a positive.
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I especially like the
action in the S&P. It reversed after tagging the recent lows.
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So what do we do? Thursday’s action is definitely
a positive. Ideally, such reversals in the indices would also
correspond with some market-timing signals. And, the S&P chart is
a little too perfect. With that said, for the nimble, you might
try dipping your toe in on the long side for an attempt at a bounce
play. Keep in mind that we are still in a bear market and it remains
mostly choppy out there. So, keep it light and have some potential
shorts handy.
As I look through my charts/scans tonight, I’m
still seeing very few decent longs and a plethora of potential shorts.
With that said, here are a few:
Smith International (SII)
sold off on Thursday to give up nearly all of Wednesday’s rally.
This action suggests that its downtrend remains intact. It also sets
up an inverted micro cup and handle.
Lands End (LE),
mentioned Wednesday night, still looks vulnerable.
CV Therapeutics (CVTX)
looks poised to resume its downtrend out of a pullback from lows/big
picture inverted cup and handle.
Best of luck with
your trading on Friday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
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book is unlike any other trading manual I have read……I feel like
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year in and year out….”
Mark H.
Tulsa, Oklahoma
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