The Game Plan Remains The Same
On Tuesday, the Nasdaq opened flat but quickly began to rally.
However, it soon found its high and began to sell off. It traded mostly sideways
through mid-day and finally resumed its sell off going into the close. This action has it closing poorly and
at multi-month closing lows.
Since the Nasdaq has been holding up generally better than
the other indices, the February lows (a) are a level to watch. If broken decisively,
it will likely have a negative impact on the overall market.
Once again, the S&P had a similar day with the exception that it
was hit even harder.
This action breaks it out of the bottom of its recent trading
range and puts the index at new multi-month lows.
Last October’s lows, circa 768 (not shown), are the next
potential target here.
And once again, the Dow also closed at multi-month lows.
So what do we do? Tuesday’s action showed us more of
the same. Take a look at all the sector charts from last night’s commentary (see
archive) and add another down bar. And once again, “real”
stocks are being sold with the S&P continuing to get hit harder than the
Nasdaq. Therefore, based on the above, the short
side remains the “obvious” play. However, I would continue
to keep it light since we are becoming more oversold. Probably the best thing to
do is to take profits/trail stops on existing positions, especially on any
negative news.
Looking to potential setups, Kohls
(
KSS |
Quote |
Chart |
News |
PowerRating) in the weak
retail-department stores sub-sector(a), looks like it has the potential to
resume its longer-term downtrend out of a pullback from lows.
Best of luck with your trading on Wednesday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
P.P.S. FYI, 6 and 12-month trading service
subscriptions (including upgrades) are 10% off through March 12th.
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