Wait!
On Wednesday, the Nasdaq opened flat but immediately began
to sell off. It found its low early in the afternoon and then generally chopped
its way higher throughout the afternoon. Finally, it resumed its sell off going
into the close. This action has it closing poorly and puts it back near its 200-day moving average.
The S&P also sold off fairly hard. This action keeps it
in a trading range.
So what do we do? Wednesday’s sell off suggests that
the market is correcting from the low relative
VIXÂ and 3-day average NYSE TRIN readings mentioned recently. Looking to
the sectors, the action remains mixed. The “running” cups mentioned
recently in areas such as telecom, software and Internet appear to remain intact
(and may be forming handles). On the other hand, the sell off in the
semis suggests that their recent rally is failing and they have the potential to
roll back over. Considering this mixed performance and recent choppy action, I
still think the best thing to do is to continue to wait for better
opportunities.
No setups tonight.
Best of luck with
your trading on Thursday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
“….recently read your book and thought it was one of the best I have ever read, and I read
a lot of them….”
Sean G.
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