Fargo
Each evening we focus
on the most interesting aspects for the upcoming trading
day. The comments are based on observations of the nightly
updates of the Stocks/Sectors and Market Bias pages. They
are provided for educational purposes only and are not
intended to be direct trading advice. Also, keep in mind
that these remarks are made up to 12 hours in advance of the
markets opening. Therefore, overnight events may alter the
outcome of these observations.
Galleria has recently added more products. Check it out
and pre-order my upcoming book on
trading at a 20% discount while you’re there (I still
have no shame).
On Friday, the Nasdaq gapped higher
(a), tried to mount a rally, but failed. It then chopped
around for the remainder of the day and essentially ended up
going nowhere (b).
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The S&P faired better, it chopped
higher for a gain of 15 points.
It looks like an upside target for the
S&P is the 10/24 high (a) (1415), which is roughly the
50% retracement level of the 09/01 high (1530) to the 10/18
low (1305).
I’m showing this because, so far, it looks like we are in
retrace mode at best, even for the broader market.
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So what do we do? As they
say in Fargo, “aw geez!” I mean, what can I say
without saying the same thing I’ve said for weeks? Ok, in
case tonight is your first night reading this column: stick
with the more defensive issues on the long side and look to
short the speculative issues on the short side.
face=”Arial, Helvetica”>Looking to potential setups, ICN
Pharmaceuticals
(
ICN |
Quote |
Chart |
News |
PowerRating), mentioned recently, formed an
inside day on Friday. This suggests its uptrend remains
intact.
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Medicis Pharmaceuticals
(
MRX |
Quote |
Chart |
News |
PowerRating)
is in its first pullback since breaking out of a
wide-and-loose base.
Raytheon
(
RTN.B |
Quote |
Chart |
News |
PowerRating),
mentioned recently, still looks poised to rally out of a
high level “micro” cup-and-handle.
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On the short side, Novoste
(
NOVT |
Quote |
Chart |
News |
PowerRating), mentioned Thursday night, still looks
vulnerable.
PC Connection
(
PCCC |
Quote |
Chart |
News |
PowerRating),
mentioned recently and on the
Where The Action Is List, continues to drift higher but
still looks poised to resume its meltdown.
Random Thoughts
One of the less
speculative issues that doesn’t look so hot is General
Electric*
(
GE |
Quote |
Chart |
News |
PowerRating). It’s now on our
Off Lows List. One has to wonder if the old Wall Street
adage “as goes GE, so goes the market” will ring
true.
Speaking of Wall Street,
keep an eye an all-time favorite stock, Cisco
(
CSCO |
Quote |
Chart |
News |
PowerRating).
If this one drops below the October lows (48), this will
likely have a major psychological impact on the market.
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face=”Arial, Helvetica”>Best of luck with your trading on
Monday!
face=”Arial, Helvetica”>Dave Landry
P.S. Reminder:
Protective stops on every trade!
P.P.S. Hey! Have a
great weekend!
*While I’m busy having random thoughts: Is it just me, or
does it seem that those callers on CNBC who want to know
about GE always get through?
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