Good Is Still Bad
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.
face=”Arial, Helvetica”>Join me, fellow TradingMarkets.com
content providers, and other traders and money managers at
the Trading Markets 2000 conference at the Venetian Hotel
Resort and Casino in Las Vegas on October 13-15, 2000.
face=”Arial, Helvetica”>Do you swing? Read my latest trading
lesson,
Tenets Of Swing Trading.” As usual, your feedback
is welcome.
face=”Arial, Helvetica”>At the time this is being published,
the Globex S&P futures are trading 0.50 points lower and
the bond market is unchanged.
face=”Arial, Helvetica”>On Wednesday, the Nasdaq gapped
slightly lower (a) and chopped around a bit before mounting
a solid trend day lower. This action has it closing exactly
on its low (b). Based on this confirmation (resumption of
the downtrend) of the pullback from lows, Wednesday’s high
(c) becomes the upside resistance, and the recent swing low,
3,521 (d), becomes the next target on the downside. After
that — which pains me to say — could be the May lows, at
around 3,000.
width=”470″ height=”320″>
face=”Arial, Helvetica”>Once again, good was bad, as the
Nasdaq sold off in the face of positive news from Applied
Materials
(
AMAT |
Quote |
Chart |
News |
PowerRating).
face=”Arial, Helvetica”>Friday’s action will be important.
If the slide continues, it will not bode well for this
market going into next week.
face=”Arial, Helvetica”>So what do we do? This market
continues to feel heavy. Rallies continue to be met with
eager sellers. Therefore, I suppose I’ll stay in line with
my recent commentaries: Only nibble on the long side, and
consider setups on the short side.
face=”Arial, Helvetica”>Looking to potential setups, Genzyme
(
GENZ |
Quote |
Chart |
News |
PowerRating), mentioned Wednesday night and on the
From Highs List, sold off earlier in the day but
reversed to close well. This suggests that it still has the
potential to resume its longer-term uptrend.
face=”Arial, Helvetica”>Plantronics
(
PLT |
Quote |
Chart |
News |
PowerRating), on the
Where The Action Is List, is sort of a high-level
“micro” cup-with-handle that looks poised to take
out its recent highs. Play this one as you would a breakout,
with an entry above recent highs and a protective stop below
recent lows.
width=”470″ height=”320″>
On
the short side, the semis
(
$SOX.X |
Quote |
Chart |
News |
PowerRating) remain weak.
Considering this, the Semiconductor HOLDRs
(
SMH |
Quote |
Chart |
News |
PowerRating) — on
the
From Lows List, and which have formed a big-picture
inverted cup-with-handle — may be an interesting way to
play the downside here.
Applied
Materials
(
AMAT |
Quote |
Chart |
News |
PowerRating), mentioned recently, still looks
vulnerable.
Best
of luck with your trading on Friday!
face=”Arial, Helvetica”>Dave Landry
P.S. Reminder:
Protective stops on every trade!