Focus On This Sector While The Market Remains Questionable
On Friday, the Nasdaq chopped back-and-forth in narrow range trading.
Ditto for the P’s except they managed to close in the plus
column.
In the sectors, energies were strong and appear to be
resuming their sharp uptrend. That’s about it for the good news though.
Internet is hitting multi-month lows and appears to have topped. Software
is approaching multi-month lows and appears to be rolling over. The semis,
like the market itself, remain at an inflection point (i.e. support)–any
further weakness would suggests a top. Even recently stronger areas such as
retail and the homebuilders appear to be stalling short of their old highs and
could be in the early phases of forming tops.
So what do we do? The fact that the
market returned to the bottom of its trading range is concerning. Any further
weakness would be, to quote Martha, "a bad thing." Now might be a good
time to start putting together a potential list of shorts just in case the market
breaks down. On the long side, focus on the energies since a) they can trade
independently of the indices and b) they are one on of the few areas that remain
in a strong uptrend.
As far as setups, Haliburton
(
HAL |
Quote |
Chart |
News |
PowerRating) (it’s funny,
when I trade this one, I hear "Dave, what are you doing Dave"), in the
aforementioned strong energy sector, looks poised to resume its uptrend out of a
Trend Pivot Pullback (as usual, email me if you need the rules).
FYI
I have last week’s audio/visual interactive
presentation and those for the prior year archived. They cover many topics such
as scanning, choosing the best setups, psychology, position management etc… Email me if you would like
the (free) file containing the links.
For those who live in this great country–ENJOY YOUR
HOLIDAY!
Best of luck with your trading on Tuesday!
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.