Keep That Sticky Note
On Thursday, the Nasdaq rallied early but
reversed to close poorly. This action leaves a tail higher and
suggests the rally from lows may be over.Â
The S&P also
tailed (slightly) higher before reversing.Â
So what do we do?Â Last
time I checked, I still had a sticky note on my quote screen that read
“we’re in a bear market.“
Yes, the recent rally has been VERY impressive. However, one has to
wonder if this is yet another bear market bounce. Remember, some of
the best rallies have occurred during the present bear market.Â
Therefore, the overbought nature of the market combined with Market
Bias sell signals suggests that we should once again focus on the
short side. Don’t be a hero though, wait for entries and honor your
Looking to potential setups, the banks, mentioned
forever, finally reversed. This action suggests that their longer-term
downtrend remains intact. With that said, PNC Financial Services (PNC)
looks poised to resume its downtrend out of a deep pullback.
Boise Cascade (BCC),
mentioned recently,Â still looks vulnerable.
Best of luck with
your trading on Friday!
P.S. Reminder: Protective stops on
book was the best. I’ve read dozens of stock market books but when I
finished yours, something clicked. Thanks for writing it and your
column and I’ll see you in Vegas….”
Dave (aspiring trend following moron)Â
30-day, money back guarantee.