Even A Good Apple Can’t Make This Dead Cat Bounce
On Thursday, the Nasdaq opened slightly higher
but soon
found its high and began to chop sideways. Then, after a failed rally late in
the day, it sold off hard. This action has it closing at multi-month lows/new lows for
the calendar year. It remains below its 50-day moving average.
The S&P also sold off hard late in the day. This action
puts it back below its 50-day moving average.
So what do we do?
One would think that the recent
good news from Apple and Intel would have buoyed the market. Or, at the least,
one would think that it would have caused some short covering. However, as you
know, it didn’t. The fact that it can’t rally on good news is concerning. Further,
my scans haven’t produced any meaningful longs this year. Therefore, continue to
focus on the short side. However, unless you’re already positioned, you might
want to trade at a reduced size since the market is oversold.
As far as setups, Cummins
(
CMI |
Quote |
Chart |
News |
PowerRating), in manufacturing (based on their old symbol, I often wondered what they manufactured), looks
poised to resume its meltdown out of First Thrust. As usual, email me if you
need the rules for the pattern.
CIT Group
(
CIT |
Quote |
Chart |
News |
PowerRating), mentioned recently, still looks like
it has downside potential.
Best of luck with your trading on Friday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
P.P.S. Learn my newest and most advanced version of my Bow
Ties Strategy. Click
here for details.