What A Trend Following Moron Has To Say About Thursday’s Massive Rally
On Thursday, the Nasdaq lapped higher, dipped in early
trading but reversed to rally sharply.
The S&P also put in a solid rally.Â
So what do we do? The media will have you believing
that this is “the” bottom. Me? I dunno. So far, it’s just one big up
day. Yes, a painful day for a trend following moron who is heavily short, but
one up day nonetheless. In fact, even with Thursday’s rally, the market is still
lower than it was a week ago. Therefore, from where I sit, it only looks like a
pullback in a longer-term downtrend. Another reason I’ll leave the bottom picking to
others is the fact that the market remains below quite a bit of overhead
resistance (the parallel lines drawn above). There’s nothing magical about this.
It’s just an area where people who bought might be looking to get out at
breakeven. Considering the above, continue to look for shorting opportunities.
However, wait for entries and honor your stops just in case this is
“the” bottom.
As far as setups, Dynamic Materials
(
BOOM |
Quote |
Chart |
News |
PowerRating), looks like
it has the potential resume its recent slide out of a pullback–going from BOOM
to bust. However, as mentioned above, wait for an entry since it was up sharply on
Thursday.Â
OtherÂ
I would like to thank everyone who attended Wednesday’s
interactive presentation. Unfortunately, due to technical difficulties, the recording
did not “take.” Therefore, there is no link. We’ll try again next
Wednesday at noon eastern.Â
The archives to prior shows covering topics such as scanning,
sector analysis, entries, money and position management, market timing
etc.. are still available. Email if you would like a copy of these. Â
Best of luck with your trading on Friday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
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