Premature Celebration
On Tuesday, the Nasdaq opened flat and mounted a decent
rally. However, it formed a top by mid-day (check out the triple top in the
5-min chart) and sold off to close just about where it started.
The S&P rallied early on
also but stopped short of its recent highs/50-day moving average and reversed.
This action leaves a bearish tail.
What’s interesting is, once
again on the slightest hint of a rally, everyone (except Goran of course) seems
to get bullish. This leads me to believe that many are quick to get themselves
trapped on the wrong side of the market. These players will likely be the first
to bail out on the first sell off, adding fuel to the fire. Also, the fact that
we stalled out at resistance combined with market timing sell signals that
should kick in over the next few days (including a day old TRIN Reversal)
suggest that we still could test the recent lows.
So what do we do? Based on the above, I think the short
side remains the obvious play for now.
Looking to potential setups, Allergan
(
AGN |
Quote |
Chart |
News |
PowerRating)
appears to be resuming its downtrend out of a sharp pullback from lows.
Bea Systems
(
BEAS |
Quote |
Chart |
News |
PowerRating),
mentioned Monday, looks
poised to resume its strong downtrend out of a pullback from lows.
Quote Of The Day (Or Motto Of The Year?)
This
came across my desk today:
“We
must learn to differentiate clearly the fundamentally important, that which is
really basic, from that which is dispensable, and to turn aside from everything
else, from the multitude of things which clutter up the mind and divert it from
the essential.”
                          Â
Albert Einstein
Best of luck with
your trading on Wednesday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
Special thanks to David M. for this shot:
“..Very straightforward. Nicely done. My favorite chapter is “More Thoughts”.Â
The more experienced I get, the more I learn from reviewing the really simple stuff…”Â
Dirk V.
No risk,
30-day, money back guarantee.
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