Where I’m still finding opportunities
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 Wednesday, the Nasdaq rallied in early trading but found its
high by mid-morning. It then drifted sideways to lower throughout mid-day.
Finally, it sold off hard going into the close. This action has it closing
poorly and at fresh lows (on a closing basis) for the year. .
Ditto for the Ps.
So what do we do?
It’s ugly out there. The market can’t seem to muster more than an
intra-day rally. Even with Tuesday’s bounce (late in the day), the PHLX
Semiconductor Index (SOX) still lost over 4%. Other areas such as broker/dealer were
haircut over 2%. My point is that, even when the indices bounce, there are plenty of debacle de jour’s. Now, fast forward to Tuesday. The morning rally
began to scare some shorts and started to give the buy and hope (sorry,
“hold”) crowd some hope. However, when the rally waned, the shorts
breathed a sigh of relief and the longs began to give up.
Not good.
After hours isn’t any better, the indices are getting clipped even more.
So should we keep on shorting?
Well, this market “feels” like it will gap sharply lower on
Wednesday as the last of the hold outs begin to throw in the towel. However, its also due to bounce
from a severely oversold condition. Therefore, if you are aggressive, look to
play an opening gap reversal in the index shares. If you don’t understand this,
email me for an article and come to the show on Wednesday (see below). I am
seeing a plethora of shorts setting up in metals & mining (including gold)
and the energies. Therefore, if you’re not already short here, look for
opportunities–especially since they can trade contra to the (oversold and due
for a bounce) indices.
As far as setups, there are SO many Energy stocks set
up as potential shorts, I wasn’t able to pick any favorites by my deadline. The
good news is, the Oil Service HOLDRS
(
OIH |
Quote |
Chart |
News |
PowerRating) are set up as First Thrust-like
setup (email me if you need the rules).
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Wednesday’s With Dave
It’s that time again. On Wednesday 05/24/06 at 11:00 AM EST, I will be hosting my weekly interactive lesson.
There’s so much going on, I don’t even know where to begin. Namely, we’ll talk
about this market. I’ll also cover recently mentioned stocks, sectors, money/position
management, psychology, etc… Again, way too much to mention! I do promise to save some
time to 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.