Why I Think We Could See Additional Selling
On Thursday, the Nasdaq lapped lower but quickly found its
low and began to rally. However, it turned back down and sold off to new lows in
early trading. It then worked its way higher throughout most of the day.
Finally, it sold off again going into the close.
It remains above its
recent trading range.
The S&P put in a somewhat similar performance.
It too remains above the top of its recent trading range.
The VIX hit new 10-month lows again on Thursday and remains
stretched away from its 10-day moving average (although, based on the “drop
off” effect, the MA is dropping quickly).
So what do we do? Even with Thursday’s sell off, the market
remains overbought. Further, the action in the VIX still suggests that
the market is due to correct. Therefore, IÂ think we could see some
additional downside. So, remain patient and start putting together your
shopping list for after the market corrects.
No setups tonight. Remain patient. We will likely see a
plethora of setups on a continued correction.Â
Best of luck with your trading on Thursday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
“….. your book is very clear and easy to follow. I think it is
helping me to improve….”
Judy C.
