Why I’m Bearish
On Thursday, the Nasdaq opened lower and continued lower
throughout the morning. Then around mid-day, on the rumors that they captured
Osama’s #1 homey, the index began to rally. It found its high late in the day
and finally pulled back going into the close.
The S&P put in a similar performance.Â
So what do we do? The major indices have
all recently sold off very hard after hitting multi-year highs. This action has
everyone who bought at (or near) those highs at a loss. Any additional downside
could prompt these people to throw in the towel. It also seems to have some of
the longer-term holders (back from the go go days), based on my informal
cocktail party survey, thinking “here we go again.” Suffice it
to say, I believe that the last few days are just a pull back from lows and that
we could resume the recent thrust down. Considering the above, technology such
as the semis, software, biotech, and telecom could offer shorting opportunities.
Other areas such as financials including broker/dealer, banks, and insurance
could begin setting up soon.Â
Looking to potential setups, Molex
(
MOLX |
Quote |
Chart |
News |
PowerRating), mentioned
recently and in the
vulnerable semis/electronics, still looks like it has the potential to continue its
downtrend out of a pullback.
Best of luck with your trading on Friday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
P.P.S. My new 20-hour course is now shipping.
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