Wait For The Market To Do This Before Getting Too Bullish
I’m Dave Landry and I approved this column.Â
On Tuesday, the Nasdaq opened weaker but quickly found its
low and rallied for a solid trend day higher.Â
This action beaks it out of its short-term trading range,
puts it above its 200-day moving
average, and has it closing in on its 50-day moving average.Â
Ditto for the S&P.
So what do we do? Okay, it’s one up day. Yes, we did break out of the
short-term trading range and yes, all three major indices are above their
200-day moving
averages. However, it takes more than one up day for me to get excited. As you’ve heard me preach before, follow though will be
key. If we turn right back down then I’ll stay bearish. If we continue to rally
then I might just turn bullish. If this sounds moronic, that’s because that’s
what trend following morons do. With that said, the trend in most sectors and
the indices still remains down Therefore, continue to look to play the short
side but make sure you wait for entries.
As far as setups, Onyx Pharmaceuticals
(
ONXX |
Quote |
Chart |
News |
PowerRating),
mentioned recently, “faked out” by trading below the prior day’s low
and reversed to close well (and in the plus column). However, it still looks
poised to resume its sharp side out of a First Thrust, especially if it can take
out (trade below) Tuesday’s low(a)–(e.g. a second entry). Note: I’ve received a few emails asking me if
this is a buy or a sell. For future reference, if the blue arrow points down it’s a potential short.Â
If the blue arrow points up, it’s a potential long. If you’re new
to shorting, email me if you need an article that explains the
mechanics. Â
Best of luck with your trading on Wednesday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
P.P.S. My new 20-hour course is now shipping.
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more, or to order.