What you should do in light of Tuesday’s action
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 stronger, traded sideways, and then
began to rally in early afternoon trading. However, it found its high late in
the day and began to sell off. This selling accelerated going into the
close. Â
The S&P put in a similar performance.Â
So what do we do? I’m concerned that the indices probed to new
highs (for the year) but then reversed to close poorly. I’m also concerned about
the fact that they haven’t made any forward progress in nearly 2 weeks.
Therefore, I think it’s important for the market to make new highs and stay
there. Until then, use caution on new positions and honor your stops on existing
positions. On the short side, I think it’s too early to get bearish.Â
No setups tonight (Tuesday). Once the market breaks to new highs, we should
start seeing new opportunities.Â
Weekly Lesson
Due to a scheduling conflict, my weekly interactive lesson will be held on
Thursday 12/08/05 (vs. Wednesday) at 11:00 AM. I plan on covering market
conditions and applied trading (i.e. discretionary techniques). I’ll also take
your questions on stocks or trading in general. Admission is free but limited
by the software. Email me if you need
instructions on how to join (the same each week).Â
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.