What It Would Take To Make A Temporary Bottom
I’m Dave Landry and I approved this column.Â
On Thursday, the Nasdaq opened slightly firmer and
initially continued higher. However it found its high in early trading and began
to drift sideways to lower. It found it low around mid-day, worked its way
slightly higher for a while but then generally worked its way sideways to lower
for the remainder of the day. Â In other words, it traded back and forth in
a fairly narrow range.Â
This action keeps it below minor resistance/its 200-day moving average.Â
The S&P also traded back and forth in a fairly narrow
range.Â
So what do we do?  I wish the the market
would just get it over with: Sell off hard, cut through the 200-day moving
average (basis the S&P) like butter, and close poorly. This would likely
scare the poo out everyone and create a panic gap down opening. From there,
we cover our shorts, and would then see a nice tradable opening gap
reversal followed by a sharp retrace over the next few days. After that,
we’d re-evaluate putting our shorts back on.* Oh well, until that occurs, I
suppose we need to trade what we see. And so far, the market, sectors, and
individual stocks all appear to be headed lower–at least that’s the direction
of the big blue arrows. Therefore, continue
to look to play the short side.Â
As far as setups, Mandalay Resort Group
(
MBG |
Quote |
Chart |
News |
PowerRating), in the
weak leisure-resorts and casinos sub-sector, still looks poised to resume its sharp
downtrend from all-time highs out of a pullback (Once again, see recent archives of this
column for more on why I like shorts that set up after a stock sells off from
new highs. Email me if you need links or pdfs.).Â
Best of luck with your trading on Friday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
P.P.S. My new 20-hour course is now shipping.
Click here to learn
more, or to order.
*Speaking of
which, just curious, am I the only one who trades in his underwear? Man that
scares the heck out of the UPS guy.
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