Here’s What You Need To Watch In Addition To The Indices
On Tuesday, the Nasdaq opened firmer but soon found
its high and then sold off hard.
Ditto for the P’s.
As bad as the indices look, when you study the
sectors, you’ll find that it’s even worse. Most tech areas are breaking
down out of their recent trading ranges. This includes (but not limited to),
biotech, hardware, Internet, selected telecom, and selected software. Outside of
tech, the banks sold off hard. Broker/dealer continued to implode. The
homebuilders appeared to have failed in their recent pullback. Retail broke down
out of its trading range. The list goes on and on. Even the strong energies
reversed after trading higher (suggesting a correction is imminent). This, in
spite of oil blasting higher. About the only bright spot was the golds. They are
plowing through overhead resistance and appear to have made a transition from
downtrend to uptrend.
So what do we do?
The index and sector
action is keeping me in “show me” mode on the long side. On the short
side, we will likely see a plethora of stocks setting up soon.
No setups tonight, manage existing shorts and honor your
stops on longs.
FYI
Tomorrow (Wednesday) at noon
Eastern, I will be doing my weekly audio/visual presentation (sign
up here). These normally last between 30 and 45 minutes
(or until all questions are answered). I have some great examples of position
and money management, market timing/hedging, and will touch upon the psychology
of trading. Hope to see you there! If you can’t make it, email me and I’ll send
you a link to the recording.
Best of luck with your trading on Wednesday!
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.