Short Lived
Well as you
can see the bounce for the markets was short lived...as anticipated.
This is the type of environment we could expect and right now is not conducive
with an intermediate–term
strategy. If you recall way back when, I wrote in the column that swing trades
sometimes turn into intermediate term trades. Thus far,
not many have complied with what was written.
I am not sure if anyone here has adopted
the swing trade mentality but for those who have the urge to trade,
you should look at Dave Landry’s column each night. And for those who are
interested in learning swing trading techniques, check out Dave’s book "Dave
Landry On Swing Trading."
As
many of you know,
I have incorporated a number of styles in my trading and have found it to be
very effective thus far.
As I flipped through charts the number
of stocks building constructive bases was was basically nil or sloppy and not
worth mentioning. However, looking at a potential swing play, Copart Inc.
(CPRT)
is pulling back away from its highs and is trading in a multi-week range.
On the short side, Qualcomm (QCOM)
is pulling back from its lows and is forming a handle to go with its multi-week
inverted cup.
The Biotechnology HOLDRs (BBH)
are pulling back from their lows and appears the downward trend could resume.
The fund closed the gap made on the open to close below its open.
Remember that all securities are
risky. In any trade, you should always reduce your risk by adjusting position
size and placing open protective stops where you will sell your long or
cover your short in case the market turns against you. For an introduction to
combining price stops with position sizing, see Loren’s lesson, Risky
Business.
Greg