It Doesn’t Matter What The Fed Does

On Monday, the Nasdaq opened flat and began to
sell off. However, it found its low early on and after much chopping
around, managed to close well in thin, pre-Fed trading.

The good news is that the market failed to
“come apart at the seams” after Friday’s debacle.

 

The S&P, which
was also choppy, managed to outperform the Nasdaq. It held above
Friday’s low and also closed well.

 

So what do we do? As
I’ve said before, it doesn’t matter what the Fed does. What does
matter is how the market reacts to what the Fed does. Therefore, don’t
be a hero and take positions on what you think they may do. Also,
remember that the market will likely make several false moves before
the real intra-day trend (if any) sets in. Although
tonight we have a plethora of market bias buy signals, I’m wondering
if they (mostly VIX related) could be caused by a pre-Fed aberration.
Whether this is true our not, based on the lack of decent setups, low
volume, choppy trading and, of course, the looming Fed decision, I
think I’m going to take a day off from equity trading.

Should you decide to test the waters, oil service
($OSX.X)
still looks vulnerable. I am somewhat concern that we didn’t see much
follow through on Monday, but it still seems to remain in trouble
nonetheless. 

Considering the above, Smith International (SII)
and Cooper Cameron (CAM)
both still look poised to resume their strong downtrends.

It’s Not Just You

I was too angry to write
about this on Friday. Now that I’ve cooled off, I figured you might
get a kick out of it:

If you ever think you’re
the only one who gets hit with technology problems, listen to this: On
Friday, some moron driving an excavator, scooped up the phone junction
box (located across the street from my office) and deposited it about
50-feet away. God bless the telephone repair man who worked in 100
degree heat, 95% humidity to restore the lines.

On a lighter note, I
noticed someone flipped over the contractor’s port-a-potty Friday
night (I swear it wasn’t me. I admit the thought did cross my mind
when I saw the driver enter it with a newspaper earlier in the day).

Mr. Bow Tie Himself

Several of you emailed to point out that the
quote I referred to in my recent trading
lesson was from Jimmy Rogers, Jr. While thumbing through my
tattered, torn, dog eared and highlighted copy of Market Wizards to
confirm this, I came across another quote from him that I thought was
relevant:

“Wait for something
to come along that you know is right. Then take your profit, put it
back in the money market fund, and just wait again. You will come out
ahead of everybody else.”

Best of luck with
your trading on Tuesday!

Dave Landry

sentivetradingco@prodigy.net

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

“…The
book is unlike any other trading manual I have read……I feel like
it has given me a  framework for swing trading that will work
year in and year out….”

Tulsa, Oklahoma

 

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