Muddy Waters
Each evening we focus
on the most interesting aspects for the upcoming trading
day. The comments are based on observations of the nightly
updates of the Stocks/Sectors and Market Bias pages. They
are provided for educational purposes only and are not
intended to be direct trading advice. Also, keep in mind
that these remarks are made up to 12 hours in advance of the
markets opening. Therefore, overnight events may alter the
outcome of these observations.
Finding setups is
fun, but that’s just one small part of trading. Check out my latest article on
what to do After
The Setup.
I’m pleased to announce that we recently launched the Trader’s
Galleria. Check it out, there you’ll find books, software, trading courses,
computers and just about everything else a trader needs to be successful. You
can even pre-order my upcoming book on swing
trading at a 20% discount.
Just
a reminder, I’ll be speaking on the afternoon of Saturday, October 14th at the TradingMarkets2000 First Annual Traders
Conference. I’ll also be giving a one-hour private workshop held later
that day.
On
Wednesday, the Nasdaq opened flat-ish (a) and popped slightly higher. It then
proceeded to sell off in a choppy fashion. Just when it looked like the world
was going to end, and the talking heads were singing the doom-and-gloom of $50
oil, it turned around, went positive, and closed well (c).
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Although
it was unable to go positive on the day, the S&P recovered from a probe
lower. This leaves a tail below the 200-day moving average.
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There’s a lot out there to muddy up the
waters: sustained high oil prices, an upcoming G-7 meeting (which could shake up
the currencies), and continued weakness in the bond market.
So what do we do? The fact that the market
reversed and was and able to climb the wall of worry is a positive. The
continued oversold nature of the market, combined with CVR (VIX) buy, signals on
the Market
Bias Page suggests we could once again bounce from these levels.Â
Therefore, continue to look for opportunities on the long side but don’t bet the
farm.
face=”Arial, Helvetica”>Looking to potential setups, Astropower
(
APWR |
Quote |
Chart |
News |
PowerRating), on the
Pullbacks
Off Highs List, looks poised to resume its strong uptrend.Â
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Ballard Power Systems
(
BLDP |
Quote |
Chart |
News |
PowerRating), mentioned
Tuesday night and on the Pullbacks
Off Highs List, rallied nicely on Wednesday. This suggests its uptrend
remains intact.
Marvel Technology
(
MRVL |
Quote |
Chart |
News |
PowerRating) appears to have
completed a fairly deep correction and is trying to resume its uptrend. Just
wait for follow-through to the upside here as it did close off its highs on
Wednesday.
Capital One Financial
(
COF |
Quote |
Chart |
News |
PowerRating), also
mentioned Tuesday night, still looks like it has the potential to rally out of a
pullback.
On the short side, Micron Technologies
(
MU |
Quote |
Chart |
News |
PowerRating),
on the Pullbacks
Off Lows List, is a three-bar pullback from lows and a bigger picture
inverted cup-and-handle.
Best
of luck with your trading on Thursday!
face=”Arial, Helvetica”>Dave Landry
P.S. Reminder:
Protective stops on every trade!