The End Of The World
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.
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At
the time this is being published, the S&P Globex futures
are trading 1.90 points higher and the bond market is
trading down 5 ticks.
On
Thursday, the Nasdaq sold off for most of the morning. As it
threatened to take out the bottom of its recent range (a), I
received several phone calls from heavily short traders
explaining to me that it was the end of the world. Then, the
market reversed and grinded higher for what turned out to be
a nice trend day. This action has it closing on its high
(b).
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I’m
sure the aforementioned shorts weren’t the only traders who
got stuck on the wrong side of the market. If any are left,
this could help us get out of the recent range that
we’ve been stuck in.
So
what do we do? On any other day, I’d think the action is
bullish. However, with Friday’s employment report looming,
it’s anyone’s guess. Therefore, I’d remain cautiously
optimistic. Also, watch for possible early-morning reversals
off of the number.
One
last point: On the surface, everything looks fine, but there
was some damage in some of the tech darlings. See
commentary from Kevin Marder for more details here.
Looking
to potential setups, Allergan
(
AGN |
Quote |
Chart |
News |
PowerRating), mentioned Wednesday
night and on the
From Highs List, began rallying out of a pullback on
Thursday.
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Continuing
on the pullback theme, Insight Enterprises
(
NSIT |
Quote |
Chart |
News |
PowerRating), also
on the
From Highs List, looks poised to take out a trend line
from its recent highs. And Tollgrade Communications
(
TLGD |
Quote |
Chart |
News |
PowerRating)
gapped lower and sold off earlier on Thursday, but reversed
to close well. This suggests that its uptrend remains
intact.
For
you breakout players, Critical Path
(
CPTH |
Quote |
Chart |
News |
PowerRating), on the
Fab 5 List, sold off earlier on Thursday, but reversed
to close well. This may have shaken out the weak hands and
could clear the way for the stock to take out its recent
highs.
Best
of luck with your trading on Friday!
face=”Arial, Helvetica”>Dave Landry
P.S. Reminder:
Protective stops on every trade!