What this market needs
Dave Landry is principal of Sentive Trading, a money management firm, and a
principal of Harvest Capital Management. Mr. Landry is the author of two top
selling books,
>Dave Landry’s 10 Best Swing Trader Patterns And Strategies and
>Dave Landry On Swing Trading.
If you would like a free trial to Dave’s Nightly Swing Trading Alerts Report
On Tuesday, the Nasdaq opened lower and then chopped back in
forth for the rest of the day.
Ditto for the Ps.
Watching this market chop around is like watching paint dry. So, in my
boredom, I decided to mess around with some relative strength scans. I
discovered that most of the stocks that have led the S&P lately were
commodity related. I then decided to run RS scans on the Nasdaq 100 stocks. In
such, I found the following (but not limited to) “big” tech names near
the bottom of the list.
Amazon
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AMZN |
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Chart |
News |
PowerRating)
Amgen
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AMGN |
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Chart |
News |
PowerRating)
Adobe
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ADBE |
Quote |
Chart |
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PowerRating)
Dell
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DELL |
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Chart |
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PowerRating)
Ebay
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EBAY |
Quote |
Chart |
News |
PowerRating)
When I mentioned the above charts to Tom Incorvia (broker/trader), he said
“They need more cowbell.” Well said Tom, well said!
So what do we do?
One has to wonder how long a bull market
can run on commodities alone. This is especially true when financials (e.g.
broker/dealer) and tech are headed in the opposite direction. As usual though, follow through
(in the indices) is key. And so
far, we haven’t seen any since last Friday’s buying like its 1999 love
fest. Therefore, before getting too
excited about the long side, wait for follow through in the S&P and ideally
the tech heavy Nasdaq. On the short side, aggressive traders might want to watch
for shorting opportunities in areas that have recently broken down such as the
aforementioned broker/dealer.
No setups tonight. For the very aggressive, look for
shorting opportunities in the broker/dealers.
Wednesday’s With Dave
It’s that time again. On Wednesday 05/10/06 at 11:00 AM EST, I will be hosting my weekly interactive lesson.
I plan on covering market and sector conditions–especially those who need
more cowbell. I’ll also cover simple techniques that will help you avoid a losing
trade and
some money/position
management techniques using recent examples. Once I’m done with all that, I’ll will then take your questions on
individual issues or trading in general. As usual, admission is free (and I give money back guarantees if not completely satisfied!).
However, the space is limited by the software. Email me if you need instructions on how to join (the same each week) or if you would like the archives for the prior year (covering topics such as money & position management, scanning, picking the best setups, sectors, longer-term trend following and a plethora of other stuff).
Best of luck with your trading on Wednesday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
P.P.S. If you would like a free
trial to my trading service, click
here.