Market in bounce mode — what’s next?

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.
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On Tuesday, the Nasdaq rallied in early trading but soon found
its high and then sold off hard. It found its low late in the day and then
rallied going into the close. This action has it closing well and it puts it
back into the plus column.

The S&P also tailed lower but reversed.

So what do we do? The Nasdaq recovered after probing new
lows. The S&P found support near its old lows. This action, especially since
both indices are oversold, suggests that they are in bounce mode. So, should we
buy? I don’t think the risk to reward is worth it. I’d rather let them bounce and
look to re-establish positions on the short side. I know, typical for a
Trend Following Moron.

No setups tonight. Remain patient. We should see a
plethora of setups on a continued bounce.

Wednesday’s With Dave

It’s that time again. On Wednesday 07/18/06 at 11:00 AM EST, I will be hosting my weekly interactive lesson.
In addition to market and sector conditions, I will be covering why sometimes no
action is your best action. After that, I’ll take 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
bunch 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
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