Don’t Disrespect The ‘Bing
On Wednesday, the Nasdaq lapped lower on the open and sold
off. Then after some mid-day drifting, it resumed its sell off to close poorly.
The top of the recent trading range, circa 2200(a), is a
likely target–maybe even a stab below.
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The S&P acted in a similar
fashion. The top of its recent range, circa 1270, becomes a likely target here.
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As you know, last night
(Tuesday), we had 7 indicators pointing down on the Market
Bias Page. Further, there was an overbought McClellan Oscillator and TRIN
Reversal signal from Monday. Again, there is no sure thing, but statistically we
knew coming into today that it wasn’t a good day to buy. And, in perfect
hindsight, it wasn’t.
So what do we do? I’m still positive on the market, but
wonder if this pullback has run its course. Therefore, you might want to
consider stocks like energy or gold that have the ability to trade contra to the
market. And, above all, wait for entries!
Looking to potential setups, Newmont Mining (NEM),
in the strong gold and silver sector ($XAU.X)
on the Pullbacks
Off Highs List, looks like it has the potential to resume its strong uptrend.
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Astropower (APWR),
mentioned recently, still looks interesting to me.
Walk Through (cont.)
As you know, lately we have been walking through aÂ
position in RF Micro Devices (RFMD).
You might want to look at the recent archives (on the right side of this page)
before continuing. On Tuesday, we had left our stop at the two-bar low
level. Today (Wednesday) that level was taken out (a). Thank you very much!
Next!Â
general guidelines on how to enter and manage positions, see my articles on Money
Management under Trader’s Lessons.
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Thanks for all the kind words on this walk through. I
promise to do more in the future. I have to admit though, I’ll probably
“cheat” by stacking the odds in my favor. How? By paying attention to
sector and market action as shown in my article Beyond
The Setup. Â
Random Thoughts
I’m still amazed at the positive nature of the human
spirit. In spite of all the sell signals, and the fact that the market was down
sharply this morning, I still received a few calls from those looking to buy. Be
positive in life but skeptical in the markets. And, “respect the ‘Bing.”
Best of luck with your trading
on Thursday!Â
P.S. Reminder: Protective stops on every trade!
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have some really great material in there and I appreciate the knowledge that you
shared. There are few books out there that provide people with the tools
that they really need in order to trade but this is one of them..”
Nick P.
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