Not That Smart
On Monday, the Nasdaq lapped lower and initially continued
lower. Then, after chopping around for most of the morning, mounted a decent
rally. However, the rally waned going into the close. This action has the Nasdaq
stalling out at the 1950 resistance level but does keep it above the 50- and 200-day moving
averages for the second time in as many days.
The S&P seems to be stalling around the 1080 resistance
level.
So what do we do? The market is bumping up against
resistance but so far, hasn’t really done anything “wrong.” However,
it is important that we clear the aforementioned highs. I think I would continue
to err on the side of caution during this transition period. As mentioned
recently, if is the “real deal” there will be plenty of pullbacks
along the way. Therefore for now, keep it light and stick with those issues that
outperformed the market before the recent run up and have had a modest
correction as of late (e.g., consumer non-durables, homebuilders and
gaming–resorts).
Looking to potential setups, Mandalay Resort Group
(
MBG |
Quote |
Chart |
News |
PowerRating)
looks like it has the potential to resume its uptrend out of a Trend Pivot
Pullback, especially if it can take out Friday’s pivot high (a).
Other
Friday’s comments about bottom pickers seemed to have sparked a
lively debate. There’s more than one way to skin a cat. For me, it’s waiting for
confirmation of momentum and then (and only then) looking to enter to
trend to hopefully capture a piece. If you can pick bottoms, then God bless you.
I’m not that smart. In fact, I can guarantee you that I will miss every bottom
and top. However, I’ll be ready once the new trend is in place.
Best of luck with
your trading on Tuesday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
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