Here’s What You Should Be Doing This Week
On Monday, the Nasdaq opened firmer but soon found its high and began to sell
off. It found its low by mid-day and then traded higher to sideways for much of
the day before drifting lower going into the close. This action has it closing
poorly and keeps it in a sideways trading range.
The S&P put in a similar performance.
In the sectors, like the market itself, many remain
in a longer-term uptrend but have lost momentum as of late. Examples of this
include (but not limited to) software, telecom, and Internet. The semis remain
near the bottom of their wide-and-loose trading range. Biotech broke out last
week but has already given up much of those gains. Outside of tech, the banks remain below multiple
tops and/or have lost momentum. Retail remains stuck in a sideways trading
range. And following bond’s cue, the homebuilders sold off especially hard (on
Monday). This action could suggest a failed pullback here.
So what do we do? The S&P has lost
some of its upward momentum. The Nasdaq remains in a sideways trading range.
This, combined with the sector action mentioned above, suggests that we should
keep our “show me” attitude
before initiating any new longs. For the aggressive, you might keep an eye out
for transitional (early trend) shorts in technology. No matter what you do,
remember that the week between Christmas and New Years is notorious for being
thin and choppy. So, if you don’t have to be here, you might just want to take
some time off.
As far as setups, for the aggressive, Audible
(
ADBL |
Quote |
Chart |
News |
PowerRating)
looks like it has the potential to resume its recent slide out of a First Thrust
(as usual, email me if you need the rules for the pattern).
Best of luck with your trading on Tuesday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
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