What Goes Down…

July 9, 2001
Dave Landry

On Monday, the Nasdaq open slightly higher and chopped
around. Not much to talk about other than the fact that it ended the day in the
plus column and held above the 2000 level.Â

Once again, the recent lows may provide
minor support.

The S&P also ended in the
plus column. This action has it near the bottom of its recent trading range.

So what do we do? Although we have a few signals pointed
higher on the Market
Bias Page, I’d proceed with caution. Why? Because, it rarely sets up
perfectly where you get to ride the market down and then right back up. Further,
I think some damage was done on Friday. Therefore, I’d rather sit the bounce out
to see where it will take us before making a directional bet.

Looking to potential setups, on the short side,
Sigma-Aldrich
(
SIAL |
Quote |
Chart |
News |
PowerRating), on theÂ Pullbacks
Off Highs List, looks poised to resume its strong downtrend out of a narrow
range consolidation.

Second Time A Charm?

Smith International
(
SII |
Quote |
Chart |
News |
PowerRating), mentioned Thursday, triggered and reversed on Friday.
On Friday night, I suggested that the stock was worth another look. It didn’t
trigger on Monday but still looks interesting to me. Notice that Friday’s pivot
low creates a pattern I call a Trend Pivot Pullback. This is where a pullback
makes an initial false move and attracts and shakes out pullback players.

And The Winner Is….

Today’s
“no tickee, no tradee” award goes to Homestore.com
(
HOMS |
Quote |
Chart |
News |
PowerRating), a
stock mentioned on Friday. As you know, the stock got creamed on Monday.
However, it came no where close to triggering. Wait for entries.

Walk Through Con’t.

Last
Thursday and Friday,
we looked at where we could have entered, taken partial profits and tightened
stops on Human Genome Sciences
(
HGSI |
Quote |
Chart |
News |
PowerRating), a stock mentioned recently. If you
haven’t read these commentaries, now might be a good time before
proceeding.Â

When we left off on Friday, we were
discussing taking partial profits on with windfall move and tightening
protective stops on the remainder of the position to the one-bar high. On
Monday, the stock failed to take out this stop. Therefore, we will leave this
stop in place (a). This one-bar stop now becomes a two-bar stop.