Here’s The Good News…IF You Are A Trader
On Wednesday, the Nasdaq tried to rally early but quickly
found its high and sold off for a solid trend day lower.Â
This action has it hitting new lows for the calendar year
(again),
it keeps it well below its 50-day moving average, and it puts it further below overhead resistance. Â It
also suggests, at least for now, that a top is in place here.Â
The S&P also sold off hard for a solid trend day lower.
This action puts it well below its 50-day moving average
and it puts it near the bottom of its trading range.Â
Once again, the action in the Dow is also interesting. It
has the “Bow Tie” moving averages turning down and trading through the
50-day simple moving average. It also puts it well below overhead
resistance.Â
As one would imagine from the above, the carnage was
widespread on Wednesday. In fact, out of the 239
sectors/sub-sectors that I follow, only 8 finished higher–and not by much. I
guess the good news is that we are finally breaking out of this blasted trading
range that we have been in forever. As an American, I wish it would have been to
the upside. As a trader, I’m just glad.
So what do we do? Now that the market has
“tipped” its hand, we should see a plethora of shorts setting up
on the first bounce. Therefore, start putting together your watch list on the
short side. However, wait for a pullback since the market is so oversold
(remember, the methodology is based on thrusts followed by pullbacks).Â
No setups tonight.Â
Best of luck with your trading on Thursday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
P.P.S. My new 20-hour course is now shipping.
Click here for details.
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