Tail
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
market’s opening. Therefore, overnight events may alter the
outcome of these observations.
The Nasdaq gapped higher on
Wednesday’s open (a) and mounted a decent rally, but stalled out right at the 50-day moving average (c) and reversed to
close poorly (b).
The S&P also stalled out right at the 50-day
moving average, leaving a reversal “tail”.
The market’s reversing from an
overbought situation (see last night’s commentary) suggests that we are in for a
few days of correction of the recent up leg. Also, tonight (Wednesday), we have
four indicators pointing lower on the Market
Bias Page. One last point. So far,
the after-hours index futures are having a muted response to the positive IBM
earnings announcement (IBM is up over 10 bucks in early after-hours trading).
In this light, the short side remains the
logical play.
Looking to setups, British Telecom
(
BTY |
Quote |
Chart |
News |
PowerRating),
mentioned Tuesday night as Bow
Tie, still looks like it has the potential to continue its uptrend.
Jefferson Pilot
(
JP |
Quote |
Chart |
News |
PowerRating) looks poised to resume its
downtrend out of a Bow
Tie/inverted cup formation.
Aflac
(
AFL |
Quote |
Chart |
News |
PowerRating), (I bet you just did the duck thing) on the
Proprietary
Implosion List and in the weak insurance sector
(
$IUX.X |
Quote |
Chart |
News |
PowerRating), looks poised
to resume its downtrend out of a big-picture topping formation.
Celgene
(
CELG |
Quote |
Chart |
News |
PowerRating), mentioned Tuesday night and on the Pullbacks
Off Lows List, appears to be resuming its downtrend out of a pullback.
Teva Pharmaceuticals
(
TEVA |
Quote |
Chart |
News |
PowerRating), also
mentioned Tuesday night, still looks vulnerable.
Random Musings
I
received an email this morning from someone who was complaining that he missed the morning
rally. I must confess that it was tough starting today with a bearish attitude and
sitting on my hands while it seemed that the market was “off to the races,”
but I have to have some sort of plan in place and can’t get
too caught up in the action: I was ready when the reversal arrived.
Best
of luck with your trading on Thursday!
P.S. Reminder:
Protective stops on every trade!
“I
received Dave’s book Friday.
While most trading books are long on theory and lack specifics, Dave shows you
what to do Monday morning. Straight forward and understandable. His
words
are clear and concise and easy to follow.“
Scott R.
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