Good End To A Rough Week
TGIF,
the weekend is here and the heat wave here on the East
Coast should be ending tonight. Thanks to my pal Danilo for giving me
the five–day
forecast of what I should expect weather wise! Relief for the
markets came today as we saw a nice move in the major indexes for the
week.
Psychologically the trading
session Friday was very good for the markets as well as traders. We
saw the markets do a 180 in the session to close well off their lows.
Value investors jumped in the session in the afternoon to push the Dow
Jones higher for the week, unfortunately we did not see the Nasdaq
close in positive territory.
Not much on the upside to
talk about as it would be a moot
point. Ideally we need some nice follow through days on high volume to
indicate a potential intermediate term bottom is near…unfortunately
volume has been pretty low over the last couple of months which can be
attributed to the summer months but more so the markets themselves.
One stock that is basing
(but we know what happens to those stocks!) and has been holding up
pretty well in this volatile market is Advance PCS (ADVP).
Another stock in the same
group is Medical Action (MDCI)
which is forming an ascending triangle.
Among the exchange–traded
funds the Basic Industries Select Sector (XLB)
closed higher 2.5%. Note that today was an outside day with the close
near its high.
The Utilities Select Sector
(XLU)
climbed 1.9% and the Industrial Select Sector (XLI)
edged higher 1.8%.
Losing ground in the session
was the Morgan Stanley Internet Street Tracks (MII)
which fell 6.2%.
Also falling was the
Internet Infrastructure HOLDRs
Trust (IIH)
lost 4.6% followed by the DJ Large Cap Growth Street Tracks (ELG)
which fell 3.4%.
Remember that all securities
are risky. In any trade, you should always reduce your risk by
adjusting position size and placing open protective stops where
you will sell your long or cover your short in case the market turns
against you. For an introduction to combining price stops with
position sizing, see Loren’s lesson, Risky
Business.
Have a great
weekend!
Greg