Mixed Bag
On Tuesday, the Nasdaq opened soft but quickly
reversed. It then chopped around for most of the day but did manage to
close higher.
As old highs are approached, markets either
reverse or pull back and then thrust again. Said another way, they
form a double top or a cup and handle. So far, it appears the Nasdaq
appears to be forming the latter.
The S&P was soft. This action puts it further
below its below its 200-day moving average.
So what do we do? As
you can see, the market is mixed. Tech looks like it could be a winner
in here while the broader market looks like it remains in a
correction. I suppose the best thing to do is the same thing I said
last night: Look to tighten stops on existing longs, take some profits
if you have them and look to fire off a short or two until this
correction plays out.
Looking to potential
setups, Centex (CTX),
mentioned recently and in the strong residential construction sector,
still looks like it has the potential to rally out of a pullback. Wait
for an entry though as it was down again on Tuesday.
On the short side,
Electronic Data Systems (EDS)
seems to be defying its sector’s strength and looks poised to continue
its rollover.
Best of luck with
your trading on Wednesday!
Dave
Landry
P.S. Reminder: Protective stops on
every trade!
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