Same As It Ever Was
On Friday, the Nasdaq gapped lower and chopped
around.
The good news is that 2000 has now held for over
a week. If this is violated, the next support should be around 1934.
On the upside, it looks like the index may hit resistance at the top
of this range (2100) which also corresponds with the 50-day moving
average.
So for now, it looks like we are setting up in a
100-point trading range. The longer it stays in this range, the bigger
the move, either up or down, when it breaks out of it.
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The S&P also
chopped around.
Again, the top of its
recent range/50-day moving average will likely provide resistance to
the upside here. And, the recent lows, circa 1170, provide a
reference point to the downside.
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So what do we do? Nothing much has changed. The
markets are still very choppy, which means that we should continue to
keep it light. And, once again more stocks are set up on the short
side than the long. Therefore, continue to focus on the short side.
Even though biotech (mentioned Thursday night)
rallied on Friday, it still looks poised to resume its downtrend out
of a pullback from lows.
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Considering the
above, the Nasdaq Biotech Ishares (IBB)
and Biotech Holders (BBH),
both mentioned Thursday night, still look poised to continue
their downtrends out of pullbacks from lows.
Even though Human
Genome Sciences (HSGI)
rallied on Friday, it still looks vulnerable longer term. For the
nimble day trader, watch for an opening gap reversal.
Abgenix (ABGX),
mentioned recently, still looks vulnerable.
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Outside of biotech,
the oils ($XOI.X)
and oil service ($OSX.X)
appear to be setting up as pullbacks from lows. Kerr McGee (KMG)
looks most vulnerable here.
Best of luck with
your trading on Monday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
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