Know your technicals — multiple signals work best

Dave Landry is principal of Sentive
Trading, a money management firm, and a principal of Harvest Capital Management.
Mr. Landry is the author of two top selling books,

>Dave Landry’s 10 Best Swing Trader Patterns And Strategies


>Dave Landry On Swing Trading. If you would
like a free trial to Dave’s Nightly Swing Trading Alerts Report

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How Do It Know?

There’s an old Cajun joke about the Thermos: It keeps da hot tings hot and da
cold tings cold. Cher, how do it know?

In technical analysis, one of the most amazing things is that many technicals
come together at the same point. Notice in the S&P, the 1250-160 level
(mentioned recently) was a .382 Fibonacci retracement (of the 5/5/06 to 6/14/06
leg), the 200-day moving average is at that level, and it is a level of prior
support (support, once broken, becomes resistance). As you can see, all these
technicals came together at that point—How do it know? All jokes aside
(which is rare for this column), when you do see a lot of technicals come
together, it usually makes for more powerful signals. Therefore, continue to use
this level as an inflection point.

On Friday, the Nasdaq sold off in early trading but then chopped
sideways to higher for the remainder of the day.

The S&P put in a somewhat similar performance.

So what do we do?
Of course there’s no guarantee that the market
will stay below the aforementioned resistance. However, as long as it does,
continue to trade in the direction of the big blue arrow.

As far as setups. I’m seeing possible opportunities in gold, materials &
broker/dealer, metals & mining, banks, railroads, Internet, Chinese stocks,
and telecom.

Recently mentioned NII Holdings
Quote |
Chart |
News |
is set up again as a
pullback from lows.

Diamond Offshore
DO |
Quote |
Chart |
News |
, also mentioned recently, is also set up again as a
pullback from lows.

Best of luck with your trading on Monday!

Dave Landry

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

P.P.S. If you would like a free
trial to my trading service, click