The Market Is Not Scared

On Monday,  the Nasdaq lapped lower and chopped around
but managed to close well.

The S&P had a similar day.

We’ll score Monday as a
positive based on the fact that the market held up well in the face of more
Anthrax scares.

So what do we do?  Based
on the above, it appears that the short-term momentum appears to be up. True,
the market is overbought, but you can’t fight the tape. Probably the best thing
to do is to continue to keep positions on the light side and focus on those
stocks such as drugs and defense issues that have a) held up well as of late and
b) can trade contra to the overall market.

Looking to potential setups, as mentioned above, I still
like the defense issues. With that said, L-3 Communications
(
LLL |
Quote |
Chart |
News |
PowerRating)
, mentioned
recently, appears to be resuming its uptrend out of a pullback from highs.

Kronos
(
KRON |
Quote |
Chart |
News |
PowerRating)
formed a
bullish outside day in a pullback on Monday. This action suggests that its
uptrend remains intact.

Other 

As you know, in addition to the
big blue arrows,  I like to use market timing systems to help keep me on
the right side of the market. Thanks to Larry Connors, the VIX is one of my
favorite indicators for timing the market. Therefore, I’m pleased to announce
that Larry and my friend/colleague Greg Che have just released a manual on trading
VIX reversals
. 

Best of luck with
your trading on Tuesday!

Dave Landry

sentivetradingco@prodigy.net

P.S. Reminder: Protective stops on
every trade!

“..While on the road I take your book and read it again and again in the evenings. It is a bible that should be read by all traders (and I’ve been in the business for 30 years). Oh, how I wish I would have had your book 30 years ago….. keep up the good work! 

Bill B.

No risk,
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