Thank God It’s Over!
On Friday, as expected, the Nasdaq chopped around in thin
pre-holiday trading. The good news is that it managed to close in the plus
column and fairly well.
The S&P also chopped
around and, like the Nasdaq, ended in the plus column. However, it did close
off of its highs.
Whew! Thank God it’s over. This
was the choppiest, lightest-volume summer in memory. This made for a poor
environment for the swing trader — or any trader for that matter. With the return
of fall, we should see a pick up in volatility (although last week was pretty
nice!) and hopefully, more follow through.
So what do we do? Tonight we
have a plethora of buy signals on the Market Bias page. Under normal
circumstances, I’d be pretty excited. However, the market, even though it did
bounce, was somewhat puny. Therefore, wait for some confirmation in price before
getting too excited about a bounce play in here.
Looking to potential setups,
Cubist Pharmaceuticals
(
CBST |
Quote |
Chart |
News |
PowerRating) is in its first pullback since breaking out
of a base. This creates a “half” Bow Tie.Â
On the short side: For the more
aggressive traders, USA Education
(
SLM |
Quote |
Chart |
News |
PowerRating), in the weak financials sector,
looks like it may be in the early phases of making a top/Bow Tie.Â
Walk-Through Continued
On Thursday night we looked at
where you could have entered, taken partial profits and tightened stops on Broadcom
(
BRCM |
Quote |
Chart |
News |
PowerRating), a stock mentioned recently. If you haven’t
already done so, you might want to review this commentary. When we last left
off, we tightened the stop to a one-bar high. This was not hit on Friday.
Therefore, we will leave it in place and by default, it now becomes a two-bar
high. We will continue to trail stops next week at two-bar highs (unless it
makes another sharp move lower). For more on how to manage positions,
see my articles under Money
Management.
Best of luck with
your trading on Tuesday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
P.P.S. Enjoy your holiday!
“…Your book is well written, concise, and laid out so that anyone with a
rudimentary background to a master’s level trading education could be very successful. You have done a superb job! My hat is off to you Mr. Landry!!!
Matthew M.Â
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