What It Would Take For Me To Get Aggressive On The Long Side
Looking to the indices, on Monday, the Nasdaq chopped back
in forth in a fairly narrow range. It did manage to close well though. This action
keeps it right at the resistance level, circa
1900.
The S&P also put in a somewhat similar performance.
This action keeps it right below its resistance level, circa 1040.
So what do we do? I’m still seeing more shorts
setting up than longs. This is somewhat logical since my methodology, in
general, requires a pullback. Should the indices break out and stabilize (i.e.
have an orderly pull back), then the scale would be tipped towards the buy
side. For now though, since we are overbought and bumping up against
resistance, I see no reason to get aggressive. Therefore, remain patient on the
long side. On the short side, continue to look to play the weaker sectors but
don’t bet the farm since you are fighting a strong tape. Further, make sure you
are waiting for entries and ideally, weakness in the market and sector too.
Looking to potential setups, at the risk of boring
you, L-3 Communications
(
LLL |
Quote |
Chart |
News |
PowerRating),
mentioned recently and in the weak defense sector (quasi defense stock), still looks poised to resume its recent meltdown out of a pullback.
Best of luck with your trading on Tuesday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
“….your book is like an investing bible to me, and I thank you very much for writing in a simple straight forward style that even a novice like me can use….”
Thanks Much,
Cliff A.
