Her name is still Rio
Dave Landry is principal of Sentive Trading, a money management firm, and a
principal of Harvest Capital Management. Mr. Landry is the author of two top
selling books,
>Dave Landry’s 10 Best Swing Trader Patterns And Strategies and
>Dave Landry On Swing Trading.
If you would like a free trial to Dave’s Nightly Swing Trading Alerts Report
Her Name Is Still Rio
In my last column, “It’s the sitting that makes the money”, we
talked about sticking with a trade even if there is some adversity. This
was not to say that you stay in a trade even if your stop was hit. My point was
that you need to give positions room to “breathe.” This helps ride out
the normal “noise” of the market.
Let’s follow up on Companhia Vale Do Rio Doce
(
RIO |
Quote |
Chart |
News |
PowerRating), mentioned
recently. We we left off, based on the rules in my Swing Trading Primer–(email me if you need a
free copy), the stock is entered (1),
partial profits are taken (2), and the stop is then tightened to breakeven
(3). And of course, we wait(4).Â
Now notice that that the stock is now headed back in the right direction. So
far, so good (a).
Of course they don’t always do what you would like–that’s why they invented
stops. I’ll follow up on this one and many others on Wednesday at 11:00 A.M.
Eastern in my weekly interactive presentation. Admission is free but limited by
the software. Email me if you need instructions on how to join (the same each
week).Â
Housekeeping
I’m still running behind in answering emails. Thanks for your continued
patience.
On Tuesday, the Nasdaq opened flat, chopped sideways and then
generally chopped its way lower.
The S&P put in a somewhat similar performance. Â
So what do we do? The indices appear to be resuming their downtrends
out of pullbacks. No rocket science there–just trend following moron stuff.
Considering this, continue to avoid the long side. On the short side,Â
trail your stops lower on existing shorts, take partial profits when offered,
and keep an eye out for new positions. Interest sensitive areas such as the
REITS and Mortgage Investment look poised to make another leg lower.Â
No setups tonight. Â
Best of luck with your trading on Wednesday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
P.P.S. If you would like a free
trial to my trading service, click
here.