Does Friday’s action give us an all clear?

Dave Landry is principal of Sentive Trading, a money management firm, and a
principal of Harvest Capital Management. Mr. Landry is the author of two top
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On Friday, the Nasdaq rallied sharply on the open, pulled back,
and then chopped sideways to higher for the remainder of the day.

The S&P was especially strong. It broke out past resistance to close at
5-year highs.

So what do we do?
The S&P did something. Finally. It
finally broke out past resistance. Is this the “all clear?” I dunno.
Friday’s rally is impressive but the question now becomes, will it stick?
Looking beneath the surface, retail, banks, and brokers all put in solid
rallies. However, tech areas such as software, Internet, and the semis lagged.
Can the market rally without tech? Sure, but for how long? Again, follow through will be key. If the S&P can old these levels and if the Nasdaq can
make new highs, then we should start seeing plenty of setups on the first orderly
pullback. If it rolls back over, then we will see some transitional patterns
(shorts). For now, let’s just wait and see.

No setups tonight.

Best of luck with your trading on Monday!

Dave Landry

P.S. Reminder: Protective stops on every trade!

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