Nibble Only
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.
face=”Arial, Helvetica”>Join me, fellow TradingMarkets.com
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face=”Arial, Helvetica”>Do you swing? Read my latest trading
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Tenets Of Swing Trading.” As usual, your feedback
is welcome.
face=”Arial, Helvetica”>At the time this is being published,
the Globex S&P futures are trading 0.60 points higher
and the bond market is trading down 1 tick.
face=”Arial, Helvetica”>On Thursday, the Nasdaq gapped down
hard but found its low within the first 15 minutes of
trading (a). It then rallied to close well (b) for a solid
trend day higher. Trough to peak, it traveled a whopping 240
points.
width=”470″ height=”320″>
face=”Arial, Helvetica”>So what do we do? I have an
unofficial end-of-the-world, bottom-of-the-market indicator.
On poor opens like Thursday, especially after a precipitous
downtrend, I usually receive numerous doom-and-gloom phone
calls. To me, this panic usually suggests that we may be
nearing a bottom. Today, I received only one such call. In
fact, soon after the market reversed, I received several
calls from the all-is-well-with-the-world crowd. This
suggests to me that there is quite a bit of optimism out
there that will need to be shaken out before this market can
recover.
face=”Arial, Helvetica”>For now, though, we’ll take what we
can get. It wouldn’t surprise me to see a one- to three-day
rally in here before the selling resumes. Therefore, for the
nimble, you might want to nibble on the long side while
watching the shorts set up.
Looking
to potential setups, AG Edwards
(
AGE |
Quote |
Chart |
News |
PowerRating), in the strong
broker/dealer sector
(
$XBD.X |
Quote |
Chart |
News |
PowerRating) and on the
From Highs List, looks poised to rally out of a
pullback/triangle. Capital One Financial
(
COF |
Quote |
Chart |
News |
PowerRating), on the
same list, is a two-step pullback.
width=”470″ height=”320″>
For
you breakout players, St. Paul Companies
(
SPC |
Quote |
Chart |
News |
PowerRating),
mentioned Wednesday night and on the
Momentum List, closed at a new high and is just
shy of taking out its 52-week highs.
Continuing
on the breakout theme, Gilead Sciences
(
GILD |
Quote |
Chart |
News |
PowerRating), on the
10 Technology List, formed a bullish outside day at new
highs on Thursday. A safer play here might be to wait for
the first pullback.
On
the short side, Sprint
(
FON |
Quote |
Chart |
News |
PowerRating), on the
From Lows List, looks poised to resume its meltdown.
Best
of luck with your trading on Friday!
face=”Arial, Helvetica”>Dave Landry
P.S. Reminder:
Protective stops on every trade!