Except For These Sectors, I Remain Bullish
Looking to the indices, on Monday, the Nasdaq opened firmer
but soon began to sell off. It found its low by mid-morning and then began to
rally. However, it found its high by mid-day and generally sold off for the
remainder of the day.
The S&P put in a somewhat similar performance
but managed to stay in the plus column.
Looking to the sectors, most areas still remain
constructive. These include, but not limited to, most financials, oil service,
telecom, drugs, Internet (so far), insurance, and biotech (especially). On the
downside, those areas that look vulnerable include: metals and mining, the
semis, most manufacturing, homebuilders, and selected energy (less oil
service).
So what do we do? I’m disappointed in Monday’s
action. I literally walked away from my trading desk for a few minutes to get
some coffee and when I returned the market was sliding. So far though, overall,
the action remains positive. The indices, especially the S&P, remains
oversold in a strong uptrend. Said alternatively, it still looks like it has the potential to rally out of a pullback. Therefore, continue to
focus mostly on the long side but, as usual, wait for entries just in the case
the market fails to follow through. On the short side, you’re probably better
off sticking with areas that can trade contra to the indices such as the
aforementioned metals & mining. For the aggressive, the semis,
especially the equipment makers, look like they have the potential to resume
their recent slide out of a First Thrust.
Looking to potential setups, for the aggressive (see above)
Photon Dynamics
(
PHTN |
Quote |
Chart |
News |
PowerRating), in the weak semis–equipment & materials
sub-sector, looks poised to resume its recent slide out of a First Thrust.
Hey Dave
“You never admit when you are
wrong! What about Foundry?”
I was wrong on Foundry
(
FDRY |
Quote |
Chart |
News |
PowerRating).
Best of luck with your trading on Tuesday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
P.P.S.
This weekend I’m having a small, exclusive three-day swing trading seminar and I would like you to attend.
Click
here.