What Tuesday’s Late-Day Sell Off Could Be Telling Us
On Tuesday, the Nasdaq drifted mostly sideways ahead of the
Fed. Then, on the announcement, it began to rally. However, it found its high
late in the day and sold off going into the close.
The S&P put in a similar performance. It remains below
its 50-day moving average.
So what do we do?
The fact that the
indices can’t mount a decent bounce from oversold suggests that they remain
vulnerable. Therefore, use this “strength” and any additional pullback
as a chance to put together your list of potential shorts. Technology in general
is a good place to look. More specifically, areas in persistent downtrends such
as the semis-equipment could provide opportunities soon. Aggressive traders
might want to consider sectors that remain at high levels but are in the early phases of
attempting to make a transition lower (i.e., potential tops). Internet is
the first that comes to mind here.
^Next^
As far as setups,
Ask Jeeves
(
ASKJ |
Quote |
Chart |
News |
PowerRating), in the
aforementioned Internet sector, looks like it has the potential to resume it recent
thrust down (i.e., a First Thrust setup). Use caution though, since it could find
support at its recent low (a).
Best of luck with your trading on Tuesday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
P.P.S. Now is a good time to get my newest 20-hour CD-ROM course, Dave Landry: The Mentoring Sessions. It’s 20% off for a limited time at TradingMarkets.com. Just
click here to learn
more, or to order.