More Corrective Action?
On Friday, the Nasdaq opened lower and sold off. It found
its low early and began to rally. However, early in the afternoon, it returned
to its lows. This action has it failing at its 50-day moving average and closing
poorly.
The S&P failed to follow through from Thursday’s
turnaround. This action puts it near its 200-day moving average.
Once again, the VIX dropped to multi-year lows and
continues to move away from its 10-day moving average.
So what do we do? The fact that the indices failed to
follow through combined with the action in the VIX suggests we may be due for
more correction. Therefore, as mentioned recently, on the long side stick with issues that have recently
pulled back from strong trends such as banks and consumer non-durables. Another
option would be to stick with issues that can trade contra to the overall market
such as the oils/oil services. Just keep it light, wait for entries and honor
your stops.
 Looking to potential setups, Regions Financial Corp.
(
RGBK |
Quote |
Chart |
News |
PowerRating) still looks like it has the potential to resume its uptrend out of a
pullback.
Newell
(
NWL |
Quote |
Chart |
News |
PowerRating), in the strong consumer non-durables,
looks like it has the potential to resume its uptrend out of a pullback.
Best of luck with
your trading on Monday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
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method, keep it simple stupid, which is great! I do not want to over complicate trading.
Keep it simple and go with the trend.
THANKS!….”
Bill B.Â
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