This Simple Technique Can Often Keep You Out Of Trouble
Wait For Entries
Eresearch Tehnology
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PowerRating), mentioned recently as a
Trend Pivot Pullback, was creamed on Monday. Fortunately, it never
“triggered”–i.e. traded above the pivot high(a). Wait for entries,
especially in questionable times.
Looking to the indices, on Monday, the Nasdaq opened flat but soon
began to sell off. Then, after drifting throughout mid-day, the selling resumed
in late-day trading. This action has it closing poorly.
The S&P put in a somewhat similar performance.
So what do we do? Now that the market has
begun to correct in earnest, I’m beginning to see more longs setting up. This
makes sense because my methodology, in general, requires a pullback. However,
unless you are an aggressive daytrader looking to play opening reversals,
there’s no need to be a hero just yet. Wait for some signs that the
market/sector/stocks are turning back up (i.e., entries). Areas in strong
uptrends that have corrected hard recent such as the semis and homebuilders
could offer opportunities. On the short side, if you are not already short the
index shares, you might want to hold off now that the correction has begun.
Should the market continue to slide, there could be transitional setups in
individual stocks soon.
Areas that have recently stalled out near their old highs such as Internet and
selected software might be a good place to begin watching for opportunities.
Looking to potential setups, Integrated Silicon Solutions
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PowerRating),
in the aforementioned strong semis, looks like it has the potential to resume its
accelerated uptrend out of a pullback.
Best of luck with your trading on Tuesday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
P.P.S. Learn my best swing
trading strategy in my new interactive CD-ROM. Click
here now for details.