Three Things That Concern Me About This Market
Looking to the indices, on Thursday, the Nasdaq chopped
back and forth in a narrow range.Â
This action keeps it below its recent trading range and below its 50-day moving average. It
still looks like a top may be forming here.Â
The S&P was also choppy but did manage to generally
work its way higher.
It remains below its recent trading
range (overhead resistance) and below its 50-day moving average. Â
Looking to the sectors, many have formed tops or are in
downtrends. These include, but not limited to biotech, homebuilders, Internet,
HMOs, utilities, selected insurance, computer hardware and financial stocks in
general.
So what do we do? I remain concerned about the
indices. Should the rally return, they will have to work their way through
overhead resistance. Further, I’m also concerned about the number of sectors
that are in either bona fide downtrends or that have recently formed tops. And
lastly, tonight (Thursday) after flipping through hundreds of charts over and
over again, I was unable to find any meaningful longs. Therefore, if I had to
pick a direction, I still think the short side might offer the best
opportunities. However, you might want to wait for a more decisive break lower
in the indices before getting too aggressive.
Looking to potential setups, on the short side, Stratasys
(
SSYS |
Quote |
Chart |
News |
PowerRating),
in the weak computer hardware sector, looks like it has the potential to
continue lower out of an inverted cup and handle.
Best of luck with your trading on Friday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
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