Next Time, Step Up

  • July 29, 2002
  • Dave Floyd

While
Friday was a disappointment relative to the
rest of the week, there were certainly some opportunities early on. The
remainder of the day was a bit of a snooze. Nonetheless, I think it is safe to
say that last week was without a doubt the best trading week, not only for the
year, but for me, going back to the heydays of late 2000. 

Like I have said many times, the majority of a trader’s income can typically be
made in short pockets, sometimes as little as a couple of weeks (like last
week). If you are a newer trader, let last week serve as a valuable lesson. The
next time you see an environment like that, step up. Now naturally, stepping up
is foolish unless you have a trading method in place that has proven effective.
If not, last week can be an environment where you can lose more money that one
can imagine.

In doing my scans over the weekend, I
came across far more long setups than I did short setups. Whether this is a sign
of anything, I do not know. However, my gut feeling is that the market is in
recovery mode right now. Frankly, I do not think it will do much one way or the
other, until it has had a chance to digest last week’s thumping. However, with
the news-and-rumor mill being as active as they have been, it may not be long
before something else spooks or drices the market in a big way.

In the meantime, if the market gets a
little bit a bid to it take a look at the Dow Diamonds
(
DIA |
Quote |
Chart |
News |
PowerRating) below.

If the market begins to deteriorate
again, look at Bell South
(
BLS |
Quote |
Chart |
News |
PowerRating).

As always, use a protective trailing
stop on these setups. I provide many more of these types of trades in my

nightly service.

From a longer-term perspective, I like
Eli Lilly
(
LLY |
Quote |
Chart |
News |
PowerRating) above $55.06

Key
Technical Numbers: (KTNs)


S&Ps   		 Nasdaq
897 974
882.70 948-52
870-75 (confluence)  939
854  932
845  923-26
833   906.5
827   892-93
818 876
811-12 860-62

As always, feel free to send me your
comments and questions. See you in TradersWire and enjoy your weekend.


David