Why I Still Remain Bullish But Think You Should Continue To Take Some Profits
On Wednesday, the Nasdaq lapped higher but quickly found
its high and began to sell off. It found its low by
mid-morning and then chopped back and forth for the remainder of the day.
The S&P put in a somewhat similar performance but found
its low later in the day.
So what do we do? The song pretty much remains the same. I
still believe that momentum still favors the upside. However, as mentioned
Tuesday night, the
market remains somewhat overbought. This is especially true on an individual
issue basis. So, we could still be in for some more corrective action.
Therefore, stick with the long side but wait for entries, continue to honor your
stops, and look to take some profits if you haven’t already done so.
No setups tonight. Remain patient, we should see numerous
setups on a continued pull back.
Random Thoughts
Lately, I seem to be getting quite a few emails describing
why the market should not be going up and how a top is near (actually, I think
“the top” was two to three weeks ago, he he). First, I am a momentum
player. My job is to believe in what I see and not try to outsmart the markets. And
lately, this has been my kind of market. The indices are going up. Sectors are
going up. And stocks are going up. Further, overall, the market has been behaving well.
It’s been generally soft in the mornings and firmer in the afternoons (today
notwithstanding). This has
been shaking out the nervous longs and attracting some top pickers. These
people are then forced back in or have to cover (respectively) as the rally
returns.
Now, I’m not smart enough to know when the rally will end
(BTW, if you are a top picker, remember to predict early and
often!). Therefore, I have to use protective stops, trailing stops, and I have
to take partial profits along the way.
FYI
mso-fareast-font-family:”Times New Roman”;mso-ansi-language:EN-US;mso-fareast-language:
EN-US;mso-bidi-language:AR-SA”>As most of you know, I rarely take vacations. And
if I do, it’s normally around times when trading is notorious for being poor
anyway (holidays, e.g.,
“Times New Roman”;mso-ansi-language:EN-US;mso-fareast-language:EN-US;
mso-bidi-language:AR-SA”>Christmas). However,
a client (of the fund) has asked me to crew in
“Times New Roman”;mso-ansi-language:EN-US;mso-fareast-language:EN-US;
mso-bidi-language:AR-SA”>Charleston
“Times New Roman”;mso-ansi-language:EN-US;mso-fareast-language:EN-US;
mso-bidi-language:AR-SA”>to
mso-ansi-language:EN-US;mso-fareast-language:EN-US;mso-bidi-language:AR-SA”>
Bermuda
“Times New Roman”;mso-ansi-language:EN-US;mso-fareast-language:EN-US;
mso-bidi-language:AR-SA”> race. Since it’s been around 10-years since I’ve
been offshore, I thought this would be a good opportunity to go sailing.
Therefore, my last column will be Thursday May 14th. My column will return on
Tuesday May 27*.
Don’t
do anything stupid while I’m away!
Best of luck with your trading on Thursday!
Dave Landry
P.S. For a limited time, my
Nightly Swing Trading Service is 15% off!
P.P.S. Reminder: Protective stops on
every trade!
*Bobby Boudreaux will be house sitting for me.
Feel free to stop by to visit with his “dawgs” or for a demonstration
of his massive gun collection.
Bobby,
don’t forget to drag the bodies inside the house before you call the police.
“….. ..I have read your book over a dozen times and I am still learning new things. Thanks for making me realize that I am a “method” man and I have since changed my ways increasing my success greatly….Thank you again for writing a terrific
book…..”
Anthony P.
