Looking Beyond The
I guess we should say, “Thank you for Friday.” Turn off the financial news stations for the weekend to get away from the barrage of fear that now seems to start after one down day. The volatility and choppiness has taken away much of the media’s conversation about the “new paradigm,” and they seem to be confused about how to articulate the fear creeping into the market.
Stay focused on your trade selection and manage your risk. Take only what the market gives you and don’t worry about what might happen. We’re not talking about protecting your mutual fund portfolios here–that’s a totally different investment process, not to be confused with short-term trading.
The short-term trend that started on May 27 is still up. Higher highs and higher lows–that’s fact, not opinion. The situation won’t change until the S&P breaks 1287.89 on the downside (we experienced a change in direction when the market closed below 1335.55). Take a look at a daily chart of the S&P and mark your inflection points as we go; it will keep you grounded in reality.
One point I should mention is the semiconductor situation. Eleven days ago, no one could buy enough of these stocks: the news was great, the research was great, the semiconductor index (SOX) was breaking out to new highs. The last two days, though, with earning from Advanced Micro Devices (AMD) and noise from other companies, it’s suddenly the end of the world. Historically, tech stocks run into the same problem every summer. But it just goes to show you how ludicrous the information flow can be.
Target Stocks Of The Day  Stay with Network Solutions [NSOL>NSOL] if the institutions come for it again today and you can get entry. Watch Yahoo [YHOO>YHOO] if it crosses its 50-day exponential moving average (EMA) of 152.71. Knight/Trimark [NITE>NITE] is right at its 50-day EMA; if it crosses, it will accelerate. Also watch Medtronic [MDT>MDT], which is in the news now, and Guidant [GDT>GDT], which perked up because of MDT and should give good entry if it crosses its 200-day EMA at 50.38.
| Program Trading Numbers | ||
| Buy | Sell | Fair Value |
| 14.05 | 10.10 | 12.20 |
Remember, if you ever have any questions, send an e-mail and I’ll answer them as soon as I can.
Editor’s note: If you want to learn more about Kevin Haggerty’s trading strategies, click on the link below to go to his new series of tutorial articles.