How Far Will The Cat Bounce?
On Thursday, the Nasdaq opened firmer and began to chop
around. It then sold off fairly hard. However, it quickly found its low and
rallied nicely. This action has it closing well.
The S&P put in a similar performance.
So what do we do? Based on price, we now officially are in
“bounce mode.” However, no one knows how far the market will go,
especially in this crazy environment. Therefore, if you played the index shares,
now is a good time to take profits and trail a stop. Also, due to the direction
of the big blue arrows (email me if you need help with this complex subject
matter), now is also a good time to start putting together a list stocks in
strong downtrends that have begun to pull back. Just make sure you wait for
entries in light of the fact that we are bouncing from lows. One last point,
while waiting for the stocks to pull back from lows, you might consider testing
the waters (on the short side) in previously strong sectors such as
healthcare-health care plans
(
$HMO |
Quote |
Chart |
News |
PowerRating) that have recently broken down. My
theory is that they may have further to fall.
Oxford Health Plans
(
OHP |
Quote |
Chart |
News |
PowerRating), in the aforementioned weak
heath care plans sector, looks poised to continue its meltdown.
Best of luck with
your trading on Friday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
P.P.S. Due to a scheduling conflict, I will not
be doing my commentary on Friday.
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