Oversold
On Thursday, the Nasdaq opened slightly lower and chopped
around. Then, late in the day, it sold off. This action has it closing poorly
and at fresh lows.
The S&P also sold off hard. This action gives up all of
Wednesday’s gains and suggests that its recent lows could be challenged.
So what do we do? Well, the market can’t even seem to
bounce. This action has it very oversold. However, as you know, just because
it’s oversold doesn’t mean it can’t go lower. This is one of those “damned if you
do and damned if you don’t” environments. If you try to short, the market will
bounce. And if you try to go long, the oversold will become more oversold.
Therefore, no matter what you decide to do, tread lightly.
No new setups tonight. If you are looking to something to
do and you are nimble (e.g., a daytrader), there may be a buying opportunity in
the index shares should the market “pop down” on sharply (and reverse)
on the opening. Just don’t overstay your welcome and honor your stop, since you
are fighting the tape.
Coaching You Through Coach
Recently, I had discussed that breakeven plus
would be a good place for a stop (after taking partial profits) on Coach Inc.
(
COH |
Quote |
Chart |
News |
PowerRating)
(see archives on the bottom right side of this page for more details). On Tuesday
night, I discussed that the recent
lows (a) would be a good place for a trailing stop. This way, barring overnight gaps, the worst you
could do was a slight profit on the remaining shares. And, as discussed
recently, would allow for a potential home run. No change in this stop for
Friday.
Last Plea!
I was unaware until after the fact that they were not
videoing my TradingMarkets 2001 presentation. However, I noticed that someone
there was making a personal copy. I would love a copy for my own viewing (I’ll
explain in further detail why if you contact me). I would be happy to pay any
costs incurred to duplicate/ship the tape (and throw in a book and 100
years of my trading service for your troubles). Please contact me via email if
you have this or might know who does. Thanks!
Best of luck with
your trading on Friday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
“……I want to send you this note to thank you for the excellent book that you
have written. I have enjoyed so much reading your book and I appreciate for your hard work, creativity and professionalism. Your book is a must-read
for every serious trader. It is simple, concise and to the point, but also full of useful detail. Again, thank you for such a wonderful job….”
Pablo
(Argentina)
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