Is This What This ‘Bull’ Market Is Made Of?

On Tuesday, the Nasdaq opened firmer but soon found
its high and began to sell off. Then after chopping sideways throughout most of
the day, it sold off again going into the close. This action gives back almost
all of Monday’s gains and it keeps the index in a sideways trading range.

The S&P put in a somewhat similar performance. This
action puts it right at its recent breakout levels. Any further weakness would
suggest a false breakout.

So what do we do? Since the S&P has been
doing  fairly well as of late, I thought it would be a good idea to
dig a little deeper to see what’s driving it. Year to date, the index is up .62%. The top 20 stocks are up between 23% and
205%.* Out of these 20 stocks, 16 are commodity
related–mostly energy with a few metals & mining. This confirms what I have
been preaching as of late. This bull market (if you want to call it that) has
been led by commodity related issues. And, I don’t think that’s what a real
bull market is made of.

No setups tonight, if the energies and metals & mining
continue to pull back, we should see some new setups there soon.

FYI

On Wednesday 3/09/05 at noon eastern, I will be doing my
weekly audio/visual presentation. This week, I plan on covering market/sector
conditions. I also have some great examples on money and position management.
Further, I will touch upon the psychological aspects of trading. To sign up
for the live/interactive broadcast, go to the Trading Markets home page and
click on the schedule there. For an archive of this broadcast (and prior
presentations), email me and I will send you the link(s).

Best of luck with your trading on Wednesday!

Dave Landry

dave@davelandry.com

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

P.P.S. Learn my newest and most advanced version of my Bow
Ties Strategy. Click
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*CLF, a mining company, is the outlier here. It is 205%. The next
highest company, VLO, an energy company, is up 61%.