How To Catch Fish

On Tuesday, the Nasdaq lapped slightly lower but
quickly found its low. It then rallied early on before giving up the
majority of its gains to end up just about where it started. It really
wasn’t as exciting as I tried to make it. It was mostly thin, choppy
trading.

 

The S&P chopped
around a bit but did manage to close slightly higher.

 

So what do we do? I was hoping that the Cisco
news would break us out of these doldrums (either way) but so far,
judging by the after hours futures action, the response is muted.
Therefore, the best thing to do is to keep it very light until the
market begins to move again. It sort of reminds me of my father-in-law
who’s a professional fishing guide. He waits for the tide to move
before taking his clients out.

Looking to potential setups, once again it seems
like many of the semiconductors ($SOX.X)
are set up. Keep in mind that the overall market remains somewhat soft
and we won’t know until Wednesday what the real reaction to the Cisco
earnings will be. With that said, here are few of interest:

RF Micro Devices (RFMD),
mentioned Monday, still looks poised to rally out of a pullback.

 

Alpha Industries (AHAA)
tailed lower but reversed to close well. This action suggests its
uptrend remains intact.

 

Integrated Device
Technology (IDTI)
looks poised to rally out of a pullback/big picture low-level cup and
handle. Just don’t overstay your welcome here as there is overhead
resistance above 40.

On the short side and outside of the semis,
Sungard Data Systems (SDS)
looks poised to resume its meltdown out of a pullback from lows.

Best of luck with
your trading on Wednesday!

Dave Landry

sentivetradingco@prodigy.net

P.S. Reminder: Protective stops on
every trade!

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