No Need To Dust Off The Bear Suit
On Friday, the Nasdaq open lower and generally worked its
way lower throughout the day. It did manage a late-day rally, but this wasn’t
enough to get it in the plus column.
The S&P put in a similar performance, or should I say,
lack of performance.
So what do we do? I’m a little
concerned that everyone that had to have stocks earlier in the week were so
quick to put their hands in their pockets over the last few days. However, so
far, I view the market action as a normal, and possibly healthy, corrective
phase. Therefore, continue to lock and load on partial profits and/or tighten stops. And,
look to play both sides until the situation resolves itself.
Looking to potential setups,
Cephalon
(
CEPH |
Quote |
Chart |
News |
PowerRating), mentioned recently, still looks like it has the
potential to rally out of a pullback.
Good Night!
I don’t know if you’re sick of hearing about Boston
Scientific
(
BSX |
Quote |
Chart |
News |
PowerRating) but I can tell you I’m sick of writing about it. Let’s put
it to bed. When we last left off (see
archives), I was
discussing the fact that stocks in low-volatility situations had the
potential to make a large price move as volatility reverts to its mean. Further,
I was discussing that in these situations, when you have pattern and trend, the
move is in the direction of the trend. I also discussed the fact that sometimes the first move
(a) is a head fake before continuing higher. As you can see, this didn’t work
(b).
Random Thoughts
I am somewhat encouraged about
all the bears that are coming out of the woodwork. Where have they been for the
last year and a half?
Best of luck with
your trading on Monday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
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Dave F.
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