Market finds support — So, is this a good time to buy?
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
and
Dave Landry On Swing Trading. If you would
like a free trial to Dave’s Nightly Swing Trading Alerts Report
click here or call 888-484-8220 ext.
1.
On Tuesday, the Nasdaq traded lower in the morning, it traded sideways
throughout mid-day, and then it rallied late in the afternoon. This action
has it finding support near its recent and longer-term lows.
The Ps put in a similar performance.
So what do we do? The fact that the Nasdaq found support
after probing new lows is a good thing. It’s also encouraging that the S&P
reversed after dipping lower. Although it hasn’t followed though from the 06/29/06
rally, it hasn’t given up those gains either (like the Nasdaq). There are a few
things that concern me though. The S&P has changed direction 6 times in the
past 7 days. This choppy action does not bode well for the momentum trader. The
other thing that’s concerning here is that most of the recent strength here has
come from commodity related stocks. Considering the above, as a trend
trader, we should wait for follow through. If this is “the” bottom,
then we will have plenty of opportunities along the way.
No setups tonight.
Wednesday’s With Dave
It’s that time again. On Wednesday 07/12/06 at 11:00 AM EST, I will be hosting my weekly interactive lesson.
This week, I plan on covering market and sector action and how to know if a
stock or market is forming a bottom. The schedule is a little light this week
due to recent choppy action. Therefore, we should have plenty enough time to
cover your questions on individual issues or trading in general. As usual, admission is free (and I give money back guarantees if not completely satisfied!).
However, the space is limited by the software. Email me if you need instructions on how to join (the same each
week) or if you would like the archives for the prior year (covering topics such as money & position management, scanning, picking the best setups, sectors, longer-term trend following and a plethora of other stuff).
Best of luck with your trading on Wednesday!
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
here.