What May Be More Important Than The Indices
Looking to the indices, on Wednesday, the Nasdaq generally
worked its way lower throughout the day but did manage to rally going into the
close. This action has it approaching prior support.
The S&P put in a somewhat similar performance. This
action keeps it right at the 1060 support level.
So what do we do? The indices in and of
themselves don’t look too bad–they are holding support. What concerns me is
what’s going on “under the hood”. Many stocks were hit especially hard
on Wednesday. Retail, for example, continued to slide. This action suggests that
a top may be in place here. The financials and interest sensitive issues such as
the homebuilders were decimated. Many other areas such as the semis,
computer hardware, and software (i.e. tech in general) remain vulnerable.
Considering the above, on the long side, you might want to stick with areas such
as the energy stocks that can trade contra to the overall market. On the short
side, for
the aggressive, you might want to continue watching for transitional (i.e. early
trend) shorts in those weaker areas mentioned above.
Looking to potential setups, Noble Energy
(
NBL |
Quote |
Chart |
News |
PowerRating) in the
strong energy-independent oil & gas sub-sector, looks like it has the
potential to resume its sharp thrust higher out of a Trend Knockout.
Best of luck with your trading on Thursday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
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