Nothing Much Has Changed
On Thursday, the Nasdaq opened flat, sold off, rallied,
drifted, sold off and finally rallied going into the close. In other words, it
was choppy but in the end, did OK
/p>
The S&P put in a similar performance.
The VIX still remains stretched away from its 10-day moving
average but so far, as mentioned recently, the average is racing to catch up to
it.
So what do we do? Nothing much has changed. The indices
remain choppy, but day over day continue to do well. On the other hand, the VIX
does remain stretched (but could just be adjusting to a lower volatility level?) and the market remains overbought as measured by both price and average
advance/decline readings. So, continue to keep it light.*
Looking to potential setups, broker/dealer appears to be
attempting to resume its uptrend out of a First Thrust (like)/pullback (TKO)
formation.
Considering the above, Bear Stearns
(
BSC |
Quote |
Chart |
News |
PowerRating) looks like it
has the potential to rally out of a similar pattern.
Still On The Trail
Medicis Pharmaceutica
(
MRX |
Quote |
Chart |
News |
PowerRating), mentioned recently (a),
continues to move nicely in our favor. As also mentioned recently, when blessed with such a nice
profit, make sure you lock in a piece and trail a stop. When I last left off
(see archives), I was discussing moving the trailing stop to 2 points below the
closing price. For Friday, based on the magnitude of Thursday’s move, I think a
1-bar low (c) would be a good place to trail a stop. (Note: this is also just
about 2 points from the close.)
Other
I’m working on a project that may involve some daytrading
of bond futures. If anyone is successful in this area and would like to
discuss this on a non-disclosure basis (both parties), please shoot me an email.
Best of luck with
your trading on Friday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
* I know some of you have bitched lately about my recent
“keep it light” mantra. Look at it this way. If I tell you to load the
boat and we correct from overbought, you’ll get mad. If I tell you to keep
it light because we are overbought and the market continues higher, then you’ll
be mad. As you can see, (and as I preach) overbought (oversold) is a
“damned if you do and damned if you don’t” situation.