Listenting To The Database
On Monday, the Nasdaq open lower and began to rally.
However, this rally was short lived. The index reversed early and sold off for a
trend day lower.
It looks like the 200-day may be a likely target for this
correction. I’ll re-evaluate the situation when/if we get there. For now though,
it still appears that market is just making a normal (and healthy) pullback.
The S&P was hit a little harder.
So what do we do? So far, the
action in the Nasdaq remains constructive. The sell off in the S&P is of
some concern, but
so far, it’s not the end of the world. It’s times like these that I take a hard
look at my database to see what it’s saying. And tonight, I see numerous stocks
in strong trends that have pulled back (i.e. set up) and was unable to
find any meaningful shorts. So as I said in Traders Wire Chat today: "I’ve
got all these great setups on the long side, I’m just waiting for the market to
turn."
With that said (or re-said), look to play the long side,
but wait for entries. As always, honor your stops ’cause that’s just my opinion,
I could be wrong.
Looking to potential setups, S1
Corp. (SONE),
in the strong Internet sector, looks poised to rally out of a first
pullback/Trend Knockout.
Genesis Microchip (GNSS),
in the strong semis, looks like it has the potential to resume its strong
uptrend out of a pullback.
Best of luck with your trading
on Tuesday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
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