Once Again, If You See These Two Things, Buy!
Looking to the indices, on Friday, the Nasdaq opened
slightly firmer but quickly found its high and began to sell off. It found its
low by mid-day but wasn’t able to rally much off of it–trading essentially
sideways for the rest of day. This action, has it approaching its 50-day moving
average.
The S&P put in a somewhat similar performance. This
action has it stalling out after just hitting new highs and suggests (so far) that we could
be in for trading range type action.
So what do we do? Technology, which has been
lagging as of late, continued lower on Friday. And, as seen above, the S&P decided to
join in for the ride. Considering this, once again, even though we remain in a
longer-term uptrend, there are two things that I’d like to see to before getting
too excited about this market: 1) A
convincing breakout in the S&P (followed by an orderly pullback of course!)
and 2) Technology joining in for the ride. Until this occurs, especially since
meaningful setups remain difficult to find, you might want to sit on your
hands when it comes to establishing new positions. Rather, manage what you
have–make sure you are scaling out (i.e. taking partial profits if you have
been offered them) on longs.
As mentioned above, the database continues to generate very few meaningful
setups. As I preach, usually this is a good time to stay on the sidelines. If
you feel you must trade, L-3 Communications
(
LLL |
Quote |
Chart |
News |
PowerRating), in telecom
equipment, looks like it has the potential to continue higher out of a pullback.
Best of luck with your trading on Monday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
P.P.S.
My new 20-hour course, Dave Landry: The Mentoring Sessions, is now on sale. Click here for $50
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