Why ‘Smoking’ Isn’t Bad For You

Editor’s Note:

This article has nothing to do with smoking. Neither Dave Landry nor
TradingMarkets.com endorses smoking. Cigarettes are bad for your health. Do not
smoke. Brice

Smoke ’em If You Got ’em

Tonight (Thursday), we have 2 smoke ’em if you got ’em
examples. Following the general rules outlined in my swing trading primer (from
my second book, email me if you need a copy of this chapter), Alcan Inccue Metal Group
(
AL |
Quote |
Chart |
News |
PowerRating)

and Diamond Offshore
(
DO |
Quote |
Chart |
News |
PowerRating)
triggered and sold off nicely to hit the
initial profit targets. Once this occurs, half of the shares are exited to lock
in partial profits and the stop is moved to breakeven on the remaining
shares—and then subsequently trailed lower. Following these simple money
management rules and barring overnight gaps, this sets you up for a possible
homerun on the remaining shares. As usual, I’ll follow up on these and other
recent examples.

NOTE: in the case of AL, an “early entry” would
have allowed for profits to be taken even sooner. See recent columns and this week’s audio/visual
presentation for more on this (see below for more details).

On Thursday, the Nasdaq drifted throughout the morning but
then sold off throughout the afternoon. This action keeps it below overhead
resistance/its 200 & 50-day moving averages.

The S&P sold off even harder. This action puts it back
below its overhead resistance.

So what do we do? The fact that the market
can’t seem to get past overhead resistance suggests that the Big Blue Arrows remain intact.
However, due to recent choppy action, I’m not seeing many worthwhile setups.
Therefore, avoid new positions for now. If you took commodity-related trades
(e.g. DO and AL mentioned above and NEM mentioned recently), make sure you look
to take partial profits (as offered) and trail a stop lower.

No setups tonight.

FYI

I have the recording to last Wednesday’s presentation
coving a host of topics including damage control, trading psychology, position
management, etc…. Also, I have the past past 9-10 months archived (covering topics such as
scanning,
sector analysis, entries, money and position management, potential
opportunities, market timing etc….). Watching these will give you a good feel
for how my methodology works–both good and bad. Email me if you are interested.

Best of luck with your trading on Thursday!

Dave Landry

dave@davelandry.com

P.S. Reminder: Protective stops on every trade!

P.P.S. Learn my newest and most advanced version of my Bow
Ties Strategy. Click
here
for details.