Wait For The Market To Do This Before Looking To Enter
Looking to the indices, on Monday, the Nasdaq opened firmer
but soon found its morning high and began to sell off. However it found its low by
mid-morning and then rallied for the remainder of the day.
This action has it closing well, closing above its 50-day
moving average (the red line below), and it puts it into overhead
resistance.
The S&P put in a somewhat similar performance.
So what do we do? As I’ve said recently, I
like to take the markets one day at a time. With that said, Monday’s action is
encouraging. It puts the S&P just shy of its old highs/top of its trading
range and it has the Nasdaq pushing into resistance. Even though this is good
news, I still don’t see any reason to make any big bets until the market can
prove itself further. Therefore, wait to see if the S&P can break out to new
highs (which also corresponds with resistance, circa 1160). You might also
wait to see if the Nasdaq confirms this breakout by getting above 2100.
The database continues to generate very few meaningful
setups. This makes sense based on the trading range nature of the market (have I
mentioned the trading range yet?). Therefore, continue to wait for a decisive
breakout (or break down) before looking to establish new positions.
Best of luck with your trading on Tuesday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
P.P.S. My new 20-hour course is now shipping.
Click here for details.