Just One Day?
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
markets opening. Therefore, overnight events may alter the
outcome of these observations.
I’m pleased to announce that we recently launched the Trader’s
Galleria. Check it out, there you’ll find books, software, trading courses,
computers and just about everything else a trader needs to be successful. You
can even pre-order my upcoming book on swing
trading at a 20% discount.
Finding setups is
fun, but that’s just one small part of trading. Check out my latest article on
what to do After
The Setup.
On
Monday, the Nasdaq lapped higher (a) and, after a brief pullback, rallied nicely
for a solid trend day higher. This action has it closing well (b). This
suggests that traders were willing to take ’em home for the first time in while.
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It’s just one day but the good news is that
the minor support at the 3700 level(d) held. Should the index continue to hold,
then it would have made a series of three major higher lows. Considering this,
staying above Monday’s low is crucial.
Speaking of higher lows, as Jeff Cooper
pointed out in his commentary this morning, violation of the obvious trend line
(c) could actually result in a rally. That’s how the market is sometimes, what
everyone knows isn’t always worth knowing.
The fact that we are back above this trendline
is encouraging, but yes, it’s just one day.
Continuing to look for some light at the end
of the tunnel, bond prices rose and crude oil fell. Lifting these two weights
off the market didn’t hurt. And finally, tonight (Tuesday) we have three CVR
(VIX) signals pointing higher on the Market
Bias Page.Â
So based on all of the above, it appears that
it may be time to nibble on the long side once again. Just keep your
stops in place, in case this thing doesn’t follow through. One last point, always
watch for a pop-up opening after a big up-day like Tuesday. You might be
better off letting stocks open to see if the rally sticks. In other words,
second entries might be your best entries after a day like Tuesday.
face=”Arial, Helvetica”>Looking to potential setups, Checkpoint Software
(
CHKP |
Quote |
Chart |
News |
PowerRating),
on the Internet
Fab 5 List, has formed a high level “micro” cup-and-handle.
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Ballard Power Systems, on the Pullbacks
Off Highs List, has dropped all the way back to its breakout point. This
suggests that the correction may be over and that it has the potential to resume
its uptrend.
Commerce One
(
CMRC |
Quote |
Chart |
News |
PowerRating), also on the Pullbacks
Off Highs List, is a loosely formed low-level cup-and-handle.
Capital One Financial
(
COF |
Quote |
Chart |
News |
PowerRating) is a four-bar
pullback from highs.
Best
of luck with your trading on Wednesday!
face=”Arial, Helvetica”>Dave Landry
P.S. Reminder:
Protective stops on every trade!