Tank You Naz
It’s easy to look at last Wednesday’s reversal and the action leading up to
today and say “What a dud.” But let’s take step back and review the
action.Â
In the best-case scenario, we may have a routine pullback within
a short-term uptrend. The worst case is that we’re resuming the longer-term
downtrend. This action is unfolding within a trading range that extends back to
early 1999. Internally, negative action in the bellwethers
(
INTC |
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PowerRating),
(
SUNW |
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(
ORCL |
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(
CSCO |
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It’s anybody’s guess who is going to win this short-term tug of war. The best
thing to do is focus on opportunities that present a clearer picture.
That’s why I like this chart of Phillip Morris
(
MO |
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PowerRating).
Thursday I showed you how MO has been rising steadily with a
channel and making meaningful upward progress off bounces from 50% retracements.
I said that a trader looking for the lowest risk entry might wait for a pullback
to the current 50% retracement level. That happened in Friday’s action. Now it
remains to be seen whether history will repeat itself. I’ll be waiting for a
confirmation and then look for pullbacks on any established short-term uptrend.
Given the current market environment, waiting for confirmation is a necessary
evil.
Have a happy and prosperous New Year,