Let The Market Guide You

August 2, 2001
Dave Landry

On Thursday, the Nasdaq gapped higher but quickly
found its high. It then sold off for most of the day before rallying
into the close.

This action has the Nasdaq stopping just short of
its 50-day moving average and right at recent resistance (circa 2100).

The S&P is also
bumping up against its 50-day moving average and recent resistance.

So what do we do? Tonight (Thursday) we have a
plethora of Market Bias Signals pointing lower. This, combined with
the fact that the market keeps bumping up against resistance suggests
that we should continue to focus on the short side. Keep mind that, so
far, other than intra-day reversals, the market hasn’t done anything
“wrong” to prove these signals right. Therefore, as always,
wait for follow through to the downside before getting too bearish.

Looking to potential setups,Â Advanced Micro
Devices (AMD)
has now retraced back to a resistance level (circa 20). If it stalls
out here, it might have one more trip to the old lows left in it.