Missouri Market


Each evening we focus
on the most interesting aspects for the upcoming trading
day. The comments are based on observations of the nightly
updates of the Stocks/Sectors and Market Bias pages. They
are provided for educational purposes only and are not
intended to be direct trading advice. Also, keep in mind
that these remarks are made up to 12 hours in advance of the
markets opening. Therefore, overnight events may alter the
outcome of these observations.


On
Friday, the Nasdaq opened flat (a) and then sold off for a solid trend day lower. This
action has it closing on its low, below the
50-day moving average and at the bottom of its trading
range (b).

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As you know, I’ve been
more positive about the market lately. However, I haven’t given up on my
“believe in what you see and not and what you believe” motto. Friday
was a prime example. I came in believing that the market had the potential to
rally but it didn’t (see below, “No Tickie, No Tradie”).

So what do we do? The
fact that we’re back below the fifty and just shy of taking out recent support
is of concern and has put me back into “show me” mode. Therefore,
keep
it light and believe in what you see.

Homestore.com
(
HOMS |
Quote |
Chart |
News |
PowerRating)
, mentioned recently, still looks like it has the
potential to rally out of a low-level cup and handle.

Art Technology Group
(
ARTG |
Quote |
Chart |
News |
PowerRating)
also looks like it has the potential to
rally out of a low-level cup and handle/first pullback.


Peregrine Systems
(
PRGN |
Quote |
Chart |
News |
PowerRating)
, on the Pullbacks
Off Highs List
, sold off earlier in the day but
was able to rally off of its lows. This suggests that its correction may
be over.

No Tickie, No Tradie

As you know, I preach follow through
before attempting an entry. This means, for longs, that the stock must trade
above the prior day’s high before an entry is considered. Cura Gen
(
CRGN |
Quote |
Chart |
News |
PowerRating)
,
mentioned Thursday, provides a great example. Notice that the stock imploded on
Friday (a). The good news is that it never got anywhere near an entry (b). Wait
for follow through.


Best
of luck with your trading on Monday!

Dave Landry

P.S. Reminder:
Protective stops on every trade!

Just sticking to the rules in your book really saved me today. The no tickie no tradie rule kept me out
(yesterday) of a stock that gapped down 39 points this morning! Thanks for explaining your techniques in a clear concise manner.”

Doug

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