Missouri Man
On Monday, the Nasdaq gapped open but quickly found its
high and sold off. It then drifted and chopped for much of the day before
resuming its sell off into the close.
The break of 2000, the bottom of its recent range, suggests
that it will test its recent lows, near 1934. Resistance to the upside remains
the 50-day moving average/2100.
The S&P also sold off hard
to close poorly.Â
This action suggests the recent
lows, near 1170, will be challenged. Minor resistance is last Thursday’s high
with major resistance at 1240/the 50-day moving average.
So what do we do? I’m still amazed at the amount of
bullishness out there. If things are so great, then why can’t the major indices
get above their moving averages (especially the 50-day)? You know me, I’m a
Missouri man. Show me. With that said, unless I see a plethora of market timing
signals kick in, I will continue to focus on the short side.
Biotech failed after rallying earlier in the day. This
action suggests that its downtrend remains intact.
The
Nasdaq Biotech Ishares
(
IBB |
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Chart |
News |
PowerRating) and Biotech Holders
(
BBH |
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PowerRating), mentioned
recently, gapped higher on Monday’s open but reversed to close poorly. This
action sets up outside day pullbacks and suggests they remain vulnerable.
Human Genome Sciences
(
HGSI |
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News |
PowerRating),
mentioned recently, gapped higher on the open (a) but reversed to close poorly.
This action suggests that its downtrend remains intact.Â
A few of you emailed me asking
me to further explain Friday’s comments: “for the
nimble day trader, watch for an opening gap reversal”. See my article Opening
Gaps: Trade ’em, Fade ’em or Ignore ’em for information on “fading
(gaps) with the trend”.
Abgenix
(
ABGX |
Quote |
Chart |
News |
PowerRating), also mentioned recently, also still looks
vulnerable.
Myriad Genetics
(
MYGN |
Quote |
Chart |
News |
PowerRating)
looks poised to resume its strong downtrend out of a pullback from lows/inverted
cup and handle.
Outside of biotech, once again,
the oils
(
$XOI.X |
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PowerRating)
and oil service
(
$OSX.X |
Quote |
Chart |
News |
PowerRating) look poised to resume their downtrends out of
pullbacks from lows. Kerr McGee
(
KMG |
Quote |
Chart |
News |
PowerRating), mentioned Friday, still looks most vulnerable here.
Best of luck with
your trading on Tuesday!
Dave Landry
P.S. Reminder: Protective stops on
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