Things To Consider Before Trading This Market
Looking to the indices, on Tuesday, the Nasdaq lapped lower
but quickly found its low and began to rally. It then stalled at the 1900 level
and began to sell off again. However, after dipping back into the minus column,
it reversed and rallied once again late in the day. This action has it closing
well and just shy of new highs for the year. The old high, circa 1910, could
provide resistance.
The S&P also put in a similar performance.
This action keeps it right below its old highs/potential resistance, circa 1040.
So what do we do? The market remains
overbought based on short-term (and longer-term) average advance/decline
readings, low average NYSE TRIN readings, and quite simply, price itself.
It also remains right below the psychological levels of its old highs (i.e.
resistance). Does this mean that it can’t go higher? As we’ve seen lately, no.
Overbought can become more overbought. However, I don’t think it’s prudent to
buy the market at these levels. I do hope that it proves me wrong and breaks
out. Then, after the first pullback, I’ll be ready to buy. For now, I think I’ll
just sit here and wait. On the short side, although some areas still look
vulnerable, nothing seems to be working. This gives me more reason to do
nothing.
No setups tonight.
Email Of The Day
Have you ever seen a market this fickle?
Best of luck with your trading on Wednesday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
“….your book is like an investing bible to me, and I thank you very much for writing in a simple straight forward style that even a novice like me can use….”
Thanks Much,
Cliff A.
