Failure At Resistance
On Monday, the Nasdaq opened flat and sold off for a solid
trend day lower.
This action gives back all of the gains from its recent
break above the 50-day moving average.
The S&P also sold off hard after recently failing at a
resistance level.
So what do we do? The fact that
the S&P failed at a resistance level (see Friday’s commentary) combined with
several Market
Bias signals pointing down suggests that we should focus mostly on the short
side.
Blockbuster Entertainment (BBI),
mentioned Friday (see archive), is still set up as a potential volatility play
on a breakout. Just wait for follow through to the upside here in light of poor
market conditions (or for the more aggressive players, look to play either side
of the volatility breakout).
HCA (HCA),
in the weak hospitals group, looks poised to resume its downtrend out of a
pullback from lows.
Kimberly Clark (KMB),
mentioned recently, appears to be resuming its downtrend.
Best of luck with your trading
on Tuesday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
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