Doldrums
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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At the time this
is being published, the Globex S&P futures are trading
up 0.25 points and the bond market is trading up 3 ticks.
face=”Arial, Helvetica”>On Monday, the Nasdaq gapped
slightly higher on the open but started to slide. However,
it found its low within the first 30 minutes of trading and
then began to rally. Then, after chopping around for much of
the day, it finally got going again during the last hour of
trading.
width=”470″ height=”320″>
face=”Arial, Helvetica”>Volume was thin, which is typical of
the late-summer doldrums. To quote one trader, “Man,
I’ve got all these great setups, but there’s no volume to
push them higher…they either sit there or chop
around.”
face=”Arial, Helvetica”>As with Friday, you can’t argue that
Monday wasn’t a decent day. This is especially true when you
consider the action in the broader market and the
“old-economy” stocks.
face=”Arial, Helvetica”>So what do we do? Even with Monday’s
follow-through, we’re still in retracement-from-lows mode.
Therefore, its OK to nibble on the long side, as long as you
don’t overstay your welcome.
face=”Arial, Helvetica”>Looking to potential setups, Quest
Diagnostics
(
DGX |
Quote |
Chart |
News |
PowerRating), mentioned Friday and on the
From Highs List, still looks like it has the potential
to rally out of a four-bar pullback.
width=”470″ height=”320″>
face=”Arial, Helvetica”>Continuing on the pullback theme,
OSI Pharmaceuticals
(
OSIP |
Quote |
Chart |
News |
PowerRating), also on the
From Highs List, rallied on Monday and looks poised to
challenge its old highs. Peoplesoft
(
PSFT |
Quote |
Chart |
News |
PowerRating), on the same
list, is consolidating after Friday’s shake-out move and
looks poised to resume its uptrend.
On
the short side, Clarent Corp.
(
CLRN |
Quote |
Chart |
News |
PowerRating), on the
From Lows List, looks poised to resume its meltdown.
Web
Methods
(
WEBM |
Quote |
Chart |
News |
PowerRating), on the
Implosion List, appears to be hitting some resistance
around par (100) and looks poised to resume its downtrend.
Best
of luck with your trading on Tuesday!
face=”Arial, Helvetica”>Dave Landry
P.S. Reminder:
Protective stops on every trade!
P.P.S. Look at the
action today in Plantronics
(
PLT |
Quote |
Chart |
News |
PowerRating), mentioned last
Thursday. If you promise not to tell, I’ll let you in on a
little secret: Watch setups for a few days after I
(or others, for that matter) mention them. This is a trick I
learned from Cooper. Sometimes markets take off when it’s a
little less obvious.