Hot Knife
Each evening we focus
on the most interesting aspects for the upcoming trading
day. The comments are based on observations of the nightly
updates of the Stocks/Sectors and Market Bias pages. They
are provided for educational purposes only and are not
intended to be direct trading advice. Also, keep in mind
that these remarks are made up to 12 hours in advance of the
markets opening. Therefore, overnight events may alter the
outcome of these observations.
face=”Arial, Helvetica”>Join me, fellow TradingMarkets.com
content providers, and other traders and money managers at
the Trading Markets 2000 conference at the Venetian Hotel
Resort and Casino in Las Vegas on October 13-15, 2000.
face=”Arial, Helvetica”>At the time this is being published,
the S&P Globex futures are trading up 0.40 points and
the bond market is trading down 2 ticks.
face=”Arial, Helvetica”>On Monday, the Nasdaq lapped
slightly higher and proceeded to sell off. It then rallied
back to just above the open, but then it met sellers — lots
of them. The index sold off, and sold off hard, for a solid
trend day lower. It closed on its low (a), once again
suggesting that traders weren’t willing to take ’em home.
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face=”Arial, Helvetica”>On Friday, I was concerned that we
would need to hold above last Wednesday’s lows (b). Today
(Monday), we went through that level like a hot knife
through butter. This action has the index closing all the
way back into recent consolidation. If we fail to stabilize
in this area, then 3,800 (c) is the next likely target.
face=”Arial, Helvetica”>The only bright spot I could find is
that there was some speculative action in some of the
high-flying new issues. IPOs such as Sunrise Telecom
(
SRTI |
Quote |
Chart |
News |
PowerRating),
Sonus Networks
(
SONS |
Quote |
Chart |
News |
PowerRating), and Nuance Communications
(
NUAN |
Quote |
Chart |
News |
PowerRating)
made new highs on decent range. You know how it is: Sizzle
sells (or, should I say, buys) better than steak —
especially in a bear market.
face=”Arial, Helvetica”>So what do we do? I see no reason to
get too bullish until we can stabilize and begin to rally
back out of this consolidation.
Looking
to potential setups, Quest Diagnostics
(
DGX |
Quote |
Chart |
News |
PowerRating), mentioned
Friday and on the
From Highs List, still looks like it has the potential
to resume its uptrend, especially if it can take out last
Thursday’s pivot high.
Interwoven
Technologies
(
IWOV |
Quote |
Chart |
News |
PowerRating) (Elmer Fudd’s favorite stock), also
on the
From Highs List, looks like it has the potential to
rally out of a pullback. Just wait for it to take out a
trendline from highs, as it already has had a few false
starts.
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Biovail
(
BVF |
Quote |
Chart |
News |
PowerRating), another pullback and mentioned Friday night,
still looks interesting to me.
For
you breakout players, Worldgate Communications
(
WGAT |
Quote |
Chart |
News |
PowerRating),
on the
60-Day Highs On Double Volume List, broke out of a
low-level cup-and-handle on Monday.
On
the short side, Synopsys
(
SNPS |
Quote |
Chart |
News |
PowerRating), on the
From Lows List, looks poised to make another leg down.
Best
of luck with your trading on Tuesday!
face=”Arial, Helvetica”>Dave Landry
P.S. Reminder:
Protective stops on every trade!