Positive But Skeptical
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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.
On Friday, the Nasdaq opened flat and headed lower. It
found its low early on and chopped around for the rest of the day.
It was a pretty slow day in pre-holiday trading. In fact,
it was so slow that the most active day trader I know, someone I never hear from
intra-day, called me to tell me a f**t joke (rhymes with heart joke).
It looks like the Nasdaq still could challenge the top of
its recent range, circa 2200.
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The S&P has now reached the
top its recent range.
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I’m still concerned about the
low VIX
readings. Is it just the volatility dying before the official kick–off
of summer,
or is it trying to tell us something?
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So what do we do? Once again, I remain positive towards the
market but skeptical shorter-term. In other words, I’m not convinced that this
correction has completed itself. Therefore, nibble only.
Looking to potential setups, Storage Technology (STOR),
mentioned Thursday night, still looks like it has the potential to rally out of
a big pullback/big picture cup and handle. Just wait for an entry as it did
close poorly on Friday. And, don’t overstay your welcome here as there is
overhead resistance above 24.
Power One (PWER)
looks like it has the potential to rally out of its first pullback since
breaking out of a base. However, don’t overstay your welcome here either, as
there is lots of overhead resistance.
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Gilead Sciences (GILD),
mentioned Thursday night, still looks interesting to me.
Symantec (SYMC),
mentioned recently, still looks like it has the potentially to rally out of a
shallow pullback.
Other
Since I’ve done the walk
through (see recent archives), I’ve been receiving quite a few questions
regarding stop placement and position management. Below are a few articles
that you might want to reference. Shoot me an email if you have any further
questions or if you have a good “heart” joke.Â
Position
Management II: Trailing Stop And Exit Techniques
Walking
Through Trades From My Stock Outlook
Position
Management (Part I): Initial Stop Placement
Best of luck with your trading on Tuesday!Â
P.S. Reminder: Protective stops on every trade!
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