Of Morons And Fast Moles

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.

Thursday, the Nasdaq gapped higher on the open (a), and after as slow start,
rallied nicely for a solid trend day higher. This action has it closing well (b)
and right at the 1800 resistance level.

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So what do we do? Well, it’s just one day up. True,
it’s the third largest percentage up day in the Nasdaq’s history but, the last
two “largest day gains” occurred during this bear market. Food
for thought. Now’s the time to not get too caught up in the euphoria and the
talking heads. Remember, they’ve been calling a bottom for about a year now. As
mentioned below, I think the best thing to do is to take it day-by-day and
setup-by-setup. Although we’re in a bounce, keep in mind the direction of the
longer-term trend and don’t completely forget about the short side.

Looking to potential setups,
Quote |
Chart |
News |
, on the Pullbacks
Off Highs List
, recovered nicely on Thursday from Wednesday’s
“knockout” move. This suggests its uptrend, or if you prefer, big
picture cup and handle (not shown), remains intact.

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On the short side, Linens and
Quote |
Chart |
News |
, on the Pullbacks
Off Lows List
, gapped higher on the open but reversed to close poorly.
This suggests that its downtrend (and inverted cup formation) remains intact.

The I Can’t Read Award

Tonight’s “I Can’t Read Award” goes to my special
little friend.

On the first up day, as I knew I would, I receive the

“Today is the proof!


This moron, oops, that’s unoriginal, I’m the moron, this
a** (rhymes with fast mole) sends me an email every time we have a one-day
rally. Last night, I thought I wrote:

“Obviously, oversold became more oversold on Wednesday. This, combined with the fact that internals improved drastically, the S&P appears to have stabilized (at least temporarily) above its recent lows, the fact that TRIN (and averages of the TRIN) reversed and the fact that the Vix appears to be stalling out near panicky levels suggests we could see a bounce in here.”

I’ll re-read my piece and let you know. I’ll
apologize if I dreamed that I wrote the above.

Will I be wrong on the direction of the market on (or while
everyone is busy celebrating, should I say if this is) the last pullback
from lows? As my good friends say in Fargo (sorry Jeannie) Aw geez….you

To those new to bear markets (and to be honest, I haven’t
seen too many of them myself), they are prone to sharp rallies as bottom pickers
rush in and shorts get scared out. So yes, this may be THE low but I’m not
convinced yet. Again, I’m not that smart. I’m just a “trend following
moron.” In general, I follow the big blue arrows. I take it one step
at a time, day-by-day and setup-by-setup. If my indicators indicate a bounce
against the overall trend (like yesterday) then I “stick my toe in the
water” but realize that “I am swimming against the tide.”
Hey, that sounds familiar. Did I dream that too?


I now see that the Gor-man is going to Tony’s seminar. Please don’t let this have a negative influence on your decision on
your going.

of luck with your trading on Friday!

Dave Landry

P.S. Reminder:
Protective stops on every trade!

“…..I think it is certainly a “must have” for anyone interested in successful short-term trading..”

John D.

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