Still A Moron
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
Wednesday, the Nasdaq lapped down hard on its open (a) and closed on its low (b)
for a solid trend day lower.
The S&P gave back all of
Tuesday’s gains and some.
It still looks like a trip to
the old lows is in the cards. At least that what my psychic Miss Cleo says.
It’s funny, every time we get a day or two bounce, I get an
email telling me what a trend following moron I am. To save you some keystrokes
on the next bounce: I AM A TREND FOLLOWING MORON. I believe that the
“The Trend Is Your Friend” is the truest market adage. As
longer-term readers know, my approach is based on the fact that “trading is
not rocket science.” I simply follow the blue arrows. Something that any
six-year old could understand. This is not to say that I blindly jump on trends
in some haphazard manner. I look for setups–usually pullbacks or variations
thereof, and use strict money management which involves protective stops,
trailing stops and taking profits. After this, I then sit patiently and wait for
the markets to set up again. It’s not brain surgery, I mean, rocket science.
So what do we do? You know what
to do.
Looking to potential setups,
the Spydrs
(
SPY |
Quote |
Chart |
News |
PowerRating), like the cash market they represent, look poised to
challenge their old lows.
Morgan Stanley Dean Witter
(
MWD |
Quote |
Chart |
News |
PowerRating),
in the vulnerable broker/dealer sector
(
$XBD.X |
Quote |
Chart |
News |
PowerRating) and on the Pullbacks
Off Lows List, looks poised to make another leg lower
Orbotech
(
ORBK |
Quote |
Chart |
News |
PowerRating), also on the Pullbacks
Off Lows List, looks poised to resume its strong downtrend. National
Instruments
(
NATI |
Quote |
Chart |
News |
PowerRating), on the same list, is a similar pattern.
The Biotech Holders
(
BBH |
Quote |
Chart |
News |
PowerRating), mentioned Tuesday, still
look vulnerable. Also, watch the Pharmaceutical Holders
(
PPH |
Quote |
Chart |
News |
PowerRating) to see if they
stall out.
Best
of luck with your trading on Thursday!
P.S. Reminder:
Protective stops on every trade!
“…Very straightforward….. Nicely done….. My favorite chapter is “More Thoughts”……”
Dirk V.
No risk, 30-day, money
back guarantee.