Now You Know Why I’ve Been Chicken
On Friday, the Nasdaq lapped lower and continued to
stair-step its way lower throughout the morning. Then, after some sideways
afternoon drift, it resumed its sell off. This action has it closing poorly and
puts it back near its 50-day moving average.
The S&P put in a similar performance.
So what do we do? Well, I guess now you know why I’ve been
so chicken sh** lately. This is the type of sell off that can happen late in the
summer from overbought conditions. However, I see no reason to run out and
start shorting just yet. I would honor your protective stops, continue to keep
it light, and wait for entries.
Looking to potential setups, broker/dealer sold off on
Friday but so far, still remains constructive. It appears to have formed a cup
bottom and still looks like it could rally out of a First Thrust (like) formation.
Bear Stearns
(
BSC |
Quote |
Chart |
News |
PowerRating), mentioned Thursday night, still looks like it
has the potential to rally out of a similar pattern.
Still On The Trail (Barely)
When I last left off (see archives), I was discussing where
a trailing stop (a) could be placed on Medicis Pharmaceutica
(
MRX |
Quote |
Chart |
News |
PowerRating), a stock
mentioned recently. For Friday, I had discussed raising the stop to just below
the 1-bar low (which was also just about $2 below the closing price). No change
for Monday.
Best of luck with
your trading on Monday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!