Still Vulnerable
On Tuesday, the Nasdaq opened slightly lower but quickly
reversed to rally sharply. Then after some mid-day drifting, it sold off to give
back all its gains. Finally, it bounced going into the close.
The S&P put in a similar performance. This action keeps
it below its 200-day moving average.
The VIX hit multi-year lows.
So what do we do? The fact that the market could not hold
on to its morning gains combined with low VIX readings (Note: although this VIX
is not stretched too far away from its 10-day moving average, the fact that it
is at multi-year lows is noteworthy) suggests that the market remains
vulnerable. Therefore, as mentioned recently, look to play both sides, but on the long side, stick with
issues that can trade contra to the overall market such as the oils and oil services.
 Looking to potential setups, the Oil Service Holders
(
OIH |
Quote |
Chart |
News |
PowerRating), mentioned Monday night, still look like they have the potential to rally out of a pullback.
If you would prefer trading individual oil/oil service stocks, look for those that are also set up as pullbacks such as Cooper Cameron
(
CAM |
Quote |
Chart |
News |
PowerRating).
Â
Best of luck with
your trading on Wednesday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
“…I have read quite a few books on investing but I have never enjoyed a book as much as I enjoyed your book. I read it on the airplane on the way back home. You very artfully made your point over and over with charts and explanations detailing what was important to watch. Your Q & A section at the end of each chapter was surprising. Each time as I would read a chapter, I would form questions in my mind. How in the world did you know which questions were unanswered? You must have had many people read your book and those questions must have come up. That was excellent…..”
name withheld
No risk,
30-day, money back guarantee.
Â