Sit On Your Hands
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 Monday, the Nasdaq opened flat and chopped lower. Then,
late in the day, it mounted a decent rally to close well. However, this wasn’t
enough to get it into the plus column. Volume was light–the lightest of 2001. As one
trader quipped: “This is slower than the slowest summer day, absolutely
nothing going on — just tedious.”
Monday’s low becomes a new reference point. If broken, the
2000 level/50-day moving average remains the next likely support level.
So what do we do? Based on the number of setups that I’m
seeing, I remain constructive towards the market. However, with a Fed decision
looming, I see no reason to take new positions. Also, don’t be too quick to
assume a market direction right after its announced. The market will likely have
a few fake-out moves before the trend sets in. You might want to sit on your
hands until the trend is established.
As usual, below are some setups that I found interesting.
Don’t be a hero. Wait for the Fed and wait for entries.
Lexmark
(
LXK |
Quote |
Chart |
News |
PowerRating), on the Pullbacks
Off Highs List, appears to be finding support near 65. This suggests that
its uptrend remains intact.
Expedia
(
EXPE |
Quote |
Chart |
News |
PowerRating) and RF Micro Devices
(
RFMD |
Quote |
Chart |
News |
PowerRating),
both mentioned
recently, still look poised to resume their strong uptrends. Once again, continue to wait for
follow through to the upside here as they both closed
poorly.
Jabil Circuit
(
JBL |
Quote |
Chart |
News |
PowerRating) looks like it has the potential to
rally out of a high-level micro cup and handle. Just don’t overstay your welcome
here as there is overhead resistance above 34.
Marvell Technology
(
MRVL |
Quote |
Chart |
News |
PowerRating)
closed well on Monday after trading lower. This action suggests that it is
attempting to resume its uptrend out of a pullback.
Symantec
(
SYMC |
Quote |
Chart |
News |
PowerRating), on
the Pullbacks
Off Highs List, looks like it has the potential to resume its strong uptrend.
No Tickee, No Tradee
Monday provided another great example of “no tickee,
no tradee.” All of the stocks mentioned, EXPE, NVDA, DGX and RFMD, were all
down. However, none triggered an entry–traded above the
prior 1-2 bar highs. As you can see, this simple rule can often keep you out of
trouble. Wait for entries.
Best
of luck with your trading on Tuesday!
P.S. Reminder:
Protective stops on every trade!
“…Thanks for writing a great book. That’s basically how I’ve come to
learn swing trading…..”
K. W.
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back guarantee.