Honor Your Stops
On Tuesday, the Nasdaq gapped lower and initially
traded lower in early trading. Then after chopping sideways for much of the day,
it rallied to close well and in the plus column.Â
Last week’s high/50-day moving average could provide
resistance here.
The S&P put in a similar performance.
The 50-day moving average (which also corresponds with the
bottom of a topping formation and trading range) could also provide resistance
here.
So what do we do? Tuesday’s turnaround is impressive.
However, so far, I’m not sure anything has really changed. We remain in a bear
market. And, more recently, an event driven environment where the market seems
to hang on every piece of news–factual or otherwise. I suppose what I’m trying
to say is that this looks a lot like short covering on the backs of the a dismal
consumer confidence number (they fed the ducks while they were quacking). I
suppose the best thing to do is to honor your stops on existing shorts.
There were no meaningful setups tonight.
Best of luck with your trading on Wednesday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
“….The swing trading book is excellent….”
Maharshi
UKÂ
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