The Things You Must Consider When Putting Together Your Game Plan
On Thursday, the Nasdaq opened soft and initially sold off.
However, it found its low fairly quickly and began to work its way higher. This
uptrend accelerated early in the afternoon. Finally, it drifted lower going into
to close but still managed to close well.
This “shakeout” move suggests that its breakout
remains intact.
The S&P put in a similar performance. Although it did
not finish in the plus column, it too made an impressive reversal.
It still appears to be bumping up against minor resistance in the
920 area.
The June 30-year Bond gapped open (a) and tailed higher but
reversed to close poorly. This action suggests that a top may be in place
here.Â
Hats off to you Derrik Hobbs! So far, so good!
The VIX* tailed higher but reversed to close poorly. This
action put it above its 10-day moving average.
Looking to the sectors, the action remains encouraging.
Sectors such as biotech rallied to new multi-month highs. Other sectors such as
banks, broker/dealer, homebuilders, insurance, HMOs, retail and Internet remain
in uptrends and are at/near new multi-month highs.Â
So what do we do? Earlier today (Thursday) I was speaking
with a fellow trader/money manager. We were discussing how the markets are a
game of clues. You have to keep your eyes open and pay attention to information
that it provides–indices, other markets (e.g. Bonds), indicators, sectors, setups etc….. Each item needs
to be evaluated first on its on merit and then in combination with all the other
pieces. Considering this, as I analyze the clues tonight, I still think that
momentum favors the upside. So, continue to look to get long. As always though,
practice proper money management.Â
Looking to potential setups, Tol Brothers
(
TOL |
Quote |
Chart |
News |
PowerRating), in the
aforementioned strong homebuilders, looks like it has the potential to
resume its uptrend out of a Trend Knockout (TKO).
Best of luck with your trading on Friday!
Dave Landry
*Once again, email me if you need some materials on how to interpret
the VIX.
P.S. Reminder: Protective stops on
every trade!
“….. It was super book and helped me quite a bit orchestrate many of the individual tools and rules I had been reading about into an integrated trading strategy. Anyhow, thanks for great book and great web site…”
Marty
