More Room To Short?
On Thursday, the Nasdaq opened lower and after an initial
sell off, began to rally. However, it found its morning high fairly quickly and
began to sell off. Then, after some mid-day chop, it resumed its sell off. This
action has it closing poorly and continues to suggest that it will take out last
week’s lows (which are also multi-year).
The S&P put in a similar performance. It too looks
poised to take out last week’s lows.
The Diamonds
(
DIA |
Quote |
Chart |
News |
PowerRating), mentioned Wednesday night, remain
set up as a
pullback from lows and also look poised to challenge last week’s lows.
So what do we do? It looks like the indices can make
it to at least last week’s lows. Did I say that already? Therefore, I still
think that the short side is playable. However, make sure you tighten your stops
and take partial profits on existing positions just in case.
Looking to potential setups, Fannie May
(
FNM |
Quote |
Chart |
News |
PowerRating) (no chart
due to technical difficulties, use your imagination), looks poised to resume its
meltdown.
Trail ’em If You Get ’em
Lately, I have been discussing using a trailing stop on the
Software Holdrs
(
SWH |
Quote |
Chart |
News |
PowerRating), mentioned recently (see archives). I was discussing using
using either a 1.5 point stop or a 2-bar high. Going into Friday, let’s assume
that we will tighten to 1.5 points (a).
Lili Update
Well, I’m still here! We got a little wind and some serious
rain but that’s about it. Reports coming in from extended family now. So far so
good! (Other than needing new underwear due to the fact that a tornado
dropped a tree into a neighbor’s house.)
I am without power and working off of laptop, so my
commentaries may be limited until power is restored.
Best of luck with
your trading on Friday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
“Feel free to quote me, the book is fantastic. It is written for traders who want to know the real basis of
successful trading. No glory stuff. No hero tales. Plain old sound advice which is a rare commodity in this
business”.
Mike Marlow
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