Why I Remain Cautious
On Thursday, the Nasdaq opened flat and after a brief dip,
rallied for a solid trend day higher.
This action has it closing well and puts it near the top of
its trading range.
The S&P put in a similar performance.
It too is now near the top of its trading range/resistance
(circa 900).
Yet again, the VIX dropped to new multi-month lows–the
lowest level since last
summer. It remains stretched more than 10% away from its 10-day moving average
(a). In other words, it’s a repeat CVR-III sell signal.Â
So what do we do? The indices remain overbought based on
price and average advance/decline readings. Further, they remain below (just
barely!) resistance. This, combined with the action in the VIX suggests that
there still could be more correction ahead. Therefore, tread very lightly on the
long side (or scale out) and keep an eye out for potential shorts. For the
aggressive, look for shorting opportunities in the index shares if they gap
higher on the open and show signs of reversing.
No setups tonight. If we break out, we should see plenty of
longs on the first correction. If we stall out, we will have numerous
transitional shorts.
Best of luck with your trading on Monday!
Enjoy Easter/Passover!!!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
*Take partial profits when offered.
“….. I’ve just finished to reading your book and LET ME TELL YOU IT’S GREAT!!!Â
RT
Italy
