Teflon or Tradable?
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.
size=”2″ face=”Arial, Helvetica”>Just a reminder, I’ll be speaking on Saturday
afternoon October 14th at the TradingMarkets2000 First Annual Traders
Conference at the Venetian Resort, Hotel & Casino in Las
Vegas. I’ll also be available for a one-hour (or more) private workshop to be held later
that day.
On
Wednesday, the Nasdaq gapped slightly lower (a), sold off, but recovered to
close well (b). This action brings the index back above the August lows
(c).Â
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The S&P looks somewhat more constructive
as it has more support at these levels (around 1400 (a)).
It
seems that we got a healthy dose of pessimism and throwing in of the towel near
the lows of the day. This is a good thing and will likely add fuel to any bounce
that this market can muster.
So what do we do? There’s no way to tell if
this rally will stick but the fact that we are back above support is
somewhat encouraging. This, coming off of an oversold condition and a
CVR I buy signal on the Market
Bias Page suggests that we could get a tradable bounce from these
levels.
Looking
to potential setups, PE Biosystems
(
PEB |
Quote |
Chart |
News |
PowerRating), on the Pullbacks
Off Highs List, rallied to close well on Wednesday after bouncing off of
recent support.Â
Software.com
(
SWCM |
Quote |
Chart |
News |
PowerRating), also on the Pullbacks
Off Highs List, formed a bullish outside day in a pullback. This suggests
its uptrend remains intact. PurchasePro.com
(
PPRO |
Quote |
Chart |
News |
PowerRating), on the Internet
Fab 5 List, and Emulex
(
EMLX |
Quote |
Chart |
News |
PowerRating), on the Trading
Where The Action Is List, are similar patterns.
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Best
of luck with your trading on Thursday!
face=”Arial, Helvetica”>Dave Landry
P.S. Reminder:
Protective stops on every trade!