Teflon Rally
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.
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.
I’m pleased to announce that we recently launched the Trader’s
Galleria. Check it out, there you’ll find books, software, trading courses,
computers and just about everything else a trader needs to be successful. You
can even pre-order my upcoming book on swing
trading at a 20% discount.
On
Thursday, the Nasdaq lapped slightly lower (a) and began to rally. However, it
found itself high early on and then sold off to close poorly (b).
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Thursday’s action is disappointing. The market
had every chance to give us a tradable bounce out of here but failed. So
the answer to yesterday’s question: “Teflon or tradable?” appears to
be Teflon-it didn’t stick. I can’t imagine that we would rally on Friday in
front of a long weekend, but I suppose stranger things have happened.
So what do we do? The market remains oversold,
but that’s no reason go long in and of itself. You might want to consider a
short or two and continue to tread lightly until things improve.Â
Looking
to potential setups, Teva Pharmaceuticals
(
TEVA |
Quote |
Chart |
News |
PowerRating), on the Pullbacks
Off Highs List and in the strong drug sector
(
$DRG.X |
Quote |
Chart |
News |
PowerRating) (and in this
market, many need strong drugs), began rallying out of a deep pullback on
Thursday. NPS Pharmaceuticals
(
NPSP |
Quote |
Chart |
News |
PowerRating), on the same list, is a somewhat
similar pattern.
On the short side, Tellabs
(
TLAB |
Quote |
Chart |
News |
PowerRating), on the Pullbacks
Off Lows List, looks poised to make another stair-step lower.Â
Applied Materials
(
AMAT |
Quote |
Chart |
News |
PowerRating), on the Implosion
10 Technology List, is forming a narrow range consolidation at low levels
and looks poised to break lower.
BTW, by now I’m sure you noticed that all four
picks from last night, EMLX, PPRO, SWCM, and PEB, were down sharply on Thursday.
However, none of these stocks triggered (traded above the prior day’s high).
Make sure you wait for follow-through before attempting entries. As you can see,
this simple concept will often keep you out of trouble.
Best
of luck with your trading on Friday!
face=”Arial, Helvetica”>Dave Landry
P.S. Reminder:
Protective stops on every trade!
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