Just When You Thought It Was Safe To Go Back Into The Water

On Friday, the Nasdaq lapped lower, and a brief
pullback, resumed its downtrend. After finding its morning lows, it
then chopped around for most of the day before drifting lower in the
afternoon.

This action takes out yesterday’s low and has the
index closing poorly.

 

The S&P also sold
off hard and took out Thursday’s lows. 

 

The fact that the
market can’t follow through from an intra-day reversal from support
(especially the S&P, see Thursday’s commentary) is disappointing. 

So what do we do?  Tonight’s commentary is a
no-brainer for me. This is where I give my standardized oversold
market speech: If you try to short an oversold market, it’ll bounce.
If you try to buy an oversold market, then oversold will become more
oversold. 

Looking to potential setups, oil service ($OSX.X)
still looks like it is in trouble. With that said, Smith International
(SII),
mentioned Thursday night, still looks vulnerable. And, Cooper Cameron
(CAM)
looks poised to resume its strong downtrend out of a pullback from
lows.

CV Therapeutics (CVTX),
mentioned Thursday night, still looks vulnerable.

Other

Last night, I received an email that questioned
if I really knew where the market is going. My answer, I don’t. No one
knows for sure. I just look at the patterns (in the indices and
individual stocks) and market timing signals and try to develop a
plan. At best, all of this is based on probabilities. Two things are
for sure though (and I think I’ve been preaching this), 1) we remain
in a bear market and 2) it’s really choppy out there. So keep it light
until conditions improve.

Speaking of waiting for the markets to come to
you, check out My
Most Valuable Trading Lesson.

Best of luck with
your trading on Monday!

Dave Landry

sentivetradingco@prodigy.net

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

P.P.S. Enjoy your weekend! 

“…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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