Her Name Is Rio
Moving on the floor now babe you’re a bird of paradise
Cherry ice cream smile I suppose it’s very nice
With a step to your left and a flick to the right you catch that mirror way out west
You know you’re something special and you look like you’re the best
Her name is Rio and she dances on the sand.*Â
Oh, sorry, the new layout on the website forces us to put some text at the
front of the column. Otherwise, the charts will get overwritten by an ad. After
doing my stock analysis, I just thought I would put whatever was in my head
here. My apologies for wasting you time. do do dooo de de do…. do do doo de de
doo Â
On Friday, the Nasdaq opened sharply lower
and continued mostly lower throughout the morning. It found its low by mid-day
and then generally worked its way higher for most of the afternoon. Finally, it
gave back some of its intra-day gains going into the close. Although it did
manage to finish off of its worst levels, it still closed below support.Â
The S&P also sold off fairly hard. It remains in
a trading range.
So what do we do? The S&P appears to
be stuck in a trading range. It has changed directions 4 times in as many days.
It could be falling into a pattern often typical with late summers (i.e.
choppy). The Nasdaq is now just below support. Any additional downside would be
concerning here. The sector action is even worse. Many sectors have recently
broken down. This includes (but not limited to) retail, REITS, homebuilders,
mortgage related, and selected technology (e.g. computer hardware). Some
sectors that have been holding up fairly well such as the semis are now probing
below support. And most of the rest, like the market itself, are in trading
ranges at best. The only exceptions remain metals & mining and the
energies. Therefore, unless you are trading in these two areas, avoid any
new positions on the long side. On the short side, look for opportunities in
areas that are breaking down from high levels such as those listed above.Â
As far as setups, Companhia Vale Do Rio Doce
(
RIO |
Quote |
Chart |
News |
PowerRating)
(now I have that old *Duran Duran song in my head), in the strong steels (and
let’s face it, what good is weak steel?), looks poised to resume its uptrend out
of a Trend Knockout (TKO). As usual, email me if you need the pattern rules. Â
Best of luck with your trading on
Monday!
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.