More Reasons Why I Think The Indices Are Headed Lower
Hey Dave!
How come you’re always so
negative?
I’ve been writing this column for over 5 years. I’m not
“always” negative. For instance, I can assure you that back in
’99 and early ’00, I was positive!Â
I actually got a few of these:
Hey Dave, thanks for the column. I
do very well by fading you.
Glad you’re getting some use out of the column!
On Wednesday, the Nasdaq sold off early but soon found its
low and began to rally. Then, after trading sideways for much of the day, it
began to rally again in late afternoon trading. However, it found its high and sold
off going into the close.
The S&P put in a somewhat similar performance. This
action has it stalling just shy of its 50-day moving average. Â
So what do we do? The market has had a
“propped up” feel to it lately. One theory is that the there has been
some end of the quarter window dressing. If this is the culprit, then one would
think we could see a correction from the overbought condition. Add in those
reasons mentioned recently such as the action in the NYSE TRIN*, the amount of
overhead resistance, and generally poor sector action and you’ll see why I still
think we could be headed lower. But hey, that’s just my opinion (and like a
nose, we all have one), I could be wrong. Considering the above, continue to
focus mostly on the short side. Auto parts, selected health services, semis, and
media-cable might be a few good places to look for opportunities. On the long
side, Internet may be worth watching (longer-term) to see if it can continue to
improve. Gaming, mentioned recently, remains strong.Â
Looking to potential setups, for the aggressive, Arrhythmia
Research Technology
(
HRT |
Quote |
Chart |
News |
PowerRating) looks poised to resume its slide out of a pullback
from lows.
Borg Warner Automotive
(
BWA |
Quote |
Chart |
News |
PowerRating),
mentioned recently as a potential short, still looks interesting.
Best of luck with your trading on Wednesday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
P.P.S. My new 20-hour course is now shipping.
Click here for details.
*See archives. Also of note is that there was a Trin Reversal sell
signal on Tuesday.
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