Due For A Bounce?
On Friday, the Nasdaq opened higher but quickly found its
high. It then sold off to test Thursday’s lows. After a mid-day bounce, it
returned to its lows. This action has it closing poorly.
The S&P put in a similar performance but did manage to
close off of its lows though.
So what do we do? The market is oversold. And, as you know,
this doesn’t mean that it can’t become even more oversold. However, I’m
beginning to see some buy signals such as a TRIN Reversal. This suggests
that we will see a bounce over the next few days. However, in light of
the weakness of the overall market and the fragile nature of world events, I
would still stick with issues that can trade contra to indices (e.g., foods, gold, oil, etc.) and/or those issues that are in the strongest trends (and
have outperformed the market on the last downturn).
Looking to potential setups, Adolph Coors
(
RKY |
Quote |
Chart |
News |
PowerRating)
mentioned Thursday night and in the
strong brewers, still looks like it has the potential to resume its strong
uptrend out of a pullback.
Lennar
(
LEN |
Quote |
Chart |
News |
PowerRating), mentioned Thursday night and in the weak
homebuilders, still looks like it has the potential to break down out of a big
picture topping formation.Â
Best of luck with
your trading on Monday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
“…….While on the road I take your book and read it again and again in the evenings. It is a bible that should be read by all traders (and I’ve been in the business for 30 years). Oh, how I wish I would have had your book 30 years ago.
Anyway, keep up the good work!…..”Â
Thanks!
Bill B.
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