Index Prognostication
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
market’s opening. Therefore, overnight events may alter the
outcome of these observations.
On
Tuesday, the Nasdaq lapped slightly higher and began to rally. However, the
rally fizzled and it sold off to close poorly (b).
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Tuesday’s action suggests the market has the
potential to challenge Friday’s low (c). Psychologically, this would not be a
good thing as many see the low as a wash-out bottom. If it does get taken out,
then the next stop could likely be the August lows and then a re-test of the May
lows.
Is all this index prognostication necessary? I
dunno, I suppose the obvious thing at this juncture is things remain dicey.
Therefore, I’ll repeat Monday’s commentary: Remain skeptical until the market gives us some sort of a bottoming pattern or
until it can get back above the 50-day and 200-day and stabilize. Tread lightly on the long side and consider some shorts.
face=”Arial, Helvetica”>Looking to potential setups, Integrated Device
Technology
(
IDTI |
Quote |
Chart |
News |
PowerRating), on the Pullbacks
Off Highs List, appears to have stabilized after Friday’s shakeout move (a).
Just wait for follow-through to the upside here as it did close poorly on
Tuesday.
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Tidwater
(
TDW |
Quote |
Chart |
News |
PowerRating), like the rest of oil
service
(
$OSX.X |
Quote |
Chart |
News |
PowerRating), appears to be trying to rally out of a deep pullback.
On the short side, Sycamore Networks
(
SCMR |
Quote |
Chart |
News |
PowerRating),
on the Pullbacks
Off Lows List, closed poorly in spite of lapping higher on Tuesday’s
open. This suggests that its recent lows (around par) will be challenged.
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Continuing on the short side, Textron
(
TXT |
Quote |
Chart |
News |
PowerRating),
also mentioned Monday night, still looks vulnerable.
Best
of luck with your trading on Wednesday!
face=”Arial, Helvetica”>Dave Landry
P.S. Reminder:
Protective stops on every trade!