This Is My All-Time Most Favorite Stock Market Indicator
Looking to the indices, on Friday, the Nasdaq chopped back
and forth in a fairly narrow range. It did manage to close on an upswing
though.
The S&P put in a similar performance.
So what do we do? As you know, I’ve been
cautious lately towards the indices even though the longer-term trend still
remains up. My reasoning is based on the fact that the market is stalling at its
old highs and remains overbought. Further, my un-scientific indicator of the
amount of hate mail received from the bulls is at an all time high (see below).
This usually predicts a correction within 1-day. No kidding! Considering the
above, I’m going to keep my “that’s my story and I’m sticking too it”
stance. I still believe the indices are prone to correct. Therefore, on
the long side, wait for a correction (don’t worry, even if the market thumbs its
nose at all these indicators and blasts to new highs, I can assure you
that there will be an opportunity on the first pullback). Once again, on the
short side, for the aggressive (or those looking to hedge longs), continue to look for a
possible trade in the index shares should they show continued signs of
reversing.
No setups tonight.
Emails Of The Day
“I have followed the analysis of Mr. Landry for over a month. I am pleased to recommend that Mr. Landry be awarded a certificate of SHAME for his analysis for being not only wrong but also missing a huge profitable
opportunity”
On 09/29/03 I wrote:
“It looks like we are in bounce from oversold mode.
This makes sense based on recent low advance/decline readings, the action in the
VIX, and the oversold nature of price itself. Also, today (Monday) I have buys
in my Oscillator Swing System and Trin Reversal System. So, there exists the
possibility that we could see additional follow through to the upside.”
–I missed the low by 1-day. The market has rallied over 4%
since then. I guess in this business, you’re only as good as your last
call.
“you are most contrain indicator I have comre across., stop harwing your stupit book”
I have never been guilty of “harwing” my
book.
Subject: You Are WRONG !
Several
days ago your call for “Short the Market” made a lot of people to lose
a tons of money. When you are wrong, you just admit it and move on. Do not
try to save your face. Today your bearish article is again going to cost
your readers a lot of money and TradingMarkets.com will lose a lot of customers.
The stock market will rally all the way into 2004.
I
loaned out my crystal ball. Therefore, I have to study the market, my
favorite indicators, sectors, and individual stocks. In other words, I call ’em
like I see ’em. Sometimes I’m right, sometimes I’m wrong. Right now we have a
very overbought market. That, for the time being, can’t seem to breakout past
its old highs. Statistically (I know statistics are worthless, 75% of all people
know that*), you normally see some sort of corrective action when this situation
occurs. Does that mean it will certainly correct? Of course not, as I wrote last
night, the market can do whatever it wants.
Best of luck with your trading on Monday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
*Homer Simpson
“….Dave Landry has written the best book on swing trading out there. I
have read hundreds of books on trading and what makes this book
standout from the rest is the clarity and simplicity in which Landry spells out his
methods. He leaves nothing out! It’s almost like a master chef giving you all his best recipes. This book provides the perfect recipe for low risk, high
probability setups. The book covers everything it takes to be a successful trader with special emphasis on money management, trading psychology,
market timing, stock and sector selection. This is a book I will keep coming
back to gleam the precious pearls of wisdom that Dave Landry generously
provides…”
David Steele
