Why The Action Next Week Will Be Important
Looking to the indices, on Friday, the Nasdaq started
weaker but quickly began to rally. Then after drifting and chopping lower
throughout mid-day, it resumed its rally going into the close. This action has it closing well and at another new closing high for the
year.
The S&P put in a similar performance. Â
Although it still remains stuck in a trading range, this
action pushes it closer to the top of that range and has it closing at
multi-month highs.
Looking to the sectors, overall, the action remains
positive. Once again, many areas made, approached, or remain at new highs. These
include (but not limited to)Â cyclicals (automotive, metals & mining,
chemicals, manufacturing, and various sub-sectors), consumer durables, consumer
non-durables, computer hardware,
software, internet, defense, and gold.Â
On the downside, major drugs finished slightly higher but
look poised to resume their strong downtrend out of a pullback.Â
So what do we do? Overall, the market and sector action remains positive. However, we are getting a little overbought and
the VIX remains low (but not stretched). This might not matter if the big
“boyz” come back next week from vacation in a buying mode. Should this
occur, the buying will likely beget more buying as no one will want to be left
behind. I guess we won’t know until later next week. Until then, keep positions
light.Â
Looking to potential setups, Deere & Co.
(
DE |
Quote |
Chart |
News |
PowerRating)
mentioned recently and in the
strong cyclicals, still looks like it has the potential to resume its accelerating
uptrend out of a pullback.
Happy Labor Day! And to those outside the U.S. happy
Monday!
Best of luck with your trading on Tuesday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
Â
“…..The best thing about Dave Landry on Swing Trading is that it is so easy to read and understand. Examples are numerous and the theme of money management – with concrete examples – is repeated throughout the entire book….”
Active Trader Magazine
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