Tread Lightly
Each evening we focus
on the most interesting aspects for the upcoming trading
day. The comments are based on observations of the nightly
updates of the Stocks/Sectors and Market Bias pages. They
are provided for educational purposes only and are not
intended to be direct trading advice. Also, keep in mind
that these remarks are made up to 12 hours in advance of the
markets opening. Therefore, overnight events may alter the
outcome of these observations.
face=”Arial, Helvetica”>Join me, fellow TradingMarkets.com
content providers, and other traders and money managers at
the Trading Markets 2000 conference at the Venetian Hotel
Resort and Casino in Las Vegas on October 13-15, 2000.
face=”Arial, Helvetica”>Do you swing? Read my latest
article, “
Tenets Of Swing Trading.” As usual, your feedback
is welcome.
face=”Arial, Helvetica”>Yuck! On Friday, the Nasdaq lapped
slightly higher and then went into a free fall. It
stabilized late in the morning, but the selling resumed late
in the day.
face=”Arial, Helvetica”>We took out the lows of the
consolidation (a) (see last night’s archive) with ease. The
old May lows (b), around 3,042, remain the next logical
target.
face=”Arial, Helvetica”>I hope I’m wrong.
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face=”Arial, Helvetica”>The Nasdaq 100, which many consider
representative of “real tech companies” (as
opposed to the “funny-money stocks”), was hit even
harder. It was down over 200 points — 5% on the day.
face=”Arial, Helvetica”>The S&P chimed in with more than
a 2% loss.
face=”Arial, Helvetica”>So what do we do? Although we are
way overdue for a bounce, you can’t get long on that. Try
it, and the market will show you more oversold. On
the other hand, get short, and you’ll probably see that
bounce. With that said, tread lightly should you decide to
trade on Monday.
Looking
to potential setups, Tut Systems
(
TUTS |
Quote |
Chart |
News |
PowerRating), on the
From Highs List, formed a bullish outside day in a
pullback. Just wait for follow-through here, as it did close
off its highs.
For
those willing to assume a high degree of risk, Metricom
(
MCOM |
Quote |
Chart |
News |
PowerRating),
on the
Where The Action Is List, seems to be finding support
back in the area it broke out from, and it looks poised to
make a snap back higher.
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For
you breakout players, Univision Communications
(
UVN |
Quote |
Chart |
News |
PowerRating),
mentioned Thursday night and on the
Momentum List, closed at an all-time high on
Friday and looks poised to break higher.
On
the short side, in the vulnerable major oils
(
$XOI.X |
Quote |
Chart |
News |
PowerRating),
Chevron
(
CHV |
Quote |
Chart |
News |
PowerRating), on the
From Lows List, appears to be stalling out in its
retracement from lows. Burlington Resources
(
BR |
Quote |
Chart |
News |
PowerRating), on the
same list, is a similar pattern.
Best
of luck with your trading on Monday!
face=”Arial, Helvetica”>Dave Landry
P.S. Reminder:
Protective stops on every trade!