Still Chicken
On Wednesday, the Nasdaq lapped lower and after an initial
rally, failed, generally working its way lower throughout the day. This action has
it closing poorly and well below its 50- and 200-day moving
averages.
The S&P also sold off to close poorly. This action puts
it close to its 200-day moving average and keeps it below the 1080 resistance level.
So what do we do? It now appears that the market is
correcting. This is especially true when you consider the heavy selling in the
recent high flyers such as the semis. Therefore, I think I’m going to continue
to play chicken. As mentioned recently, this means sticking with issues that have
outperformed the market before the recent run up and have had
orderly corrections as of late. As mentioned recently, these include defense, consumer
non-durable, homebuilders and gaming-resorts.
Looking to potential setups, Mandalay Resort Group
(
MBG |
Quote |
Chart |
News |
PowerRating),
mentioned recently as a Trend Pivot Pullback, still looks like it has the potential to resume its uptrend, especially if it can take out Friday’s pivot high.
Although it stalled out a bit after an earlier rally, L 3 Communications
(
LLL |
Quote |
Chart |
News |
PowerRating),
mentioned Tuesday night and in the strong defense sector, still looks like it has the potential to resume its
strong uptrend. Just use caution, as this stock can be very volatile.
Best of luck with
your trading on Thursday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
*Accounts.
“…I would like to express a genuine and heartfelt THANK YOU. I have learned so much from your book. I employ all your principles into my trading with some amazing results….”
Lawrence V.
No risk,
30-day, money back guarantee.