More Correction From Overbought?
On Wednesday, the Nasdaq gapped lower and after an early
rally failed, generally worked its way lower throughout the day. This action has
it closing poorly and gives back the majority of Tuesday’s gains.
The S&P also sold off hard.
So what do we do? Today’s (Wednesday) action suggests that
we are still vulnerable in the direction of the big blue arrow. Further, even
with Wednesday’s sell off, the indices remain overbought. Therefore, continue to look for shorting
opportunities in sectors in longer-term downtrends that turned back down such as
defense, consumer non-durables, utilities and the homebuilders.
Looking to potential setups, auto parts is another sector
that has turned back down and appears to be resuming is longer-term downtrend.
With that said, Borg Warner Automotive
(
BWA |
Quote |
Chart |
News |
PowerRating), mentioned recently, still
looks vulnerable.
Best of luck with
your trading on Thursday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
“…Your book is like an investing bible to
me…..thank you very much for writing in a simple straight forward style that even a novice like me can use…..
“
Cliff A.
No risk,
30-day, money-back guarantee.