Why The Indices Are At A Critical Juncture
Looking to the indices, on Thursday, the Nasdaq gapped
lower and after a brief bounce, sold off hard throughout the morning. Then,
after some sideways mid-day consolidating, it sold off again in afternoon
trading. It managed to bounce slightly going into the close but this wasn’t
enough to keep if from closing poorly.
This action has it back to its recent breakout
levels.Â
Although the S&P wasn’t hit quite as hard, it too
generally sold off throughout the day. This action has it closing towards the
bottom of its trading range.
Looking to the sectors, as one would expect, tech was
a wreck. The semis, software and telecom were hit especially hard. This action
has them stalling after just recently testing multiple highs and could suggests
that they are in the early phases of forming tops. The selling wasn’t limited to
tech though. Banks, broker/dealer and financial stocks in general were also hit
hard and could become questionable on any additional downside.
So what do we do? The indices are at a critical
juncture. It’s important to for the Nasdaq to find support at its prior breakout
levels. In the S&P, it’s important for it to find support at the bottom of
its trading range. Any break below these levels could suggests that they are
rolling over. Therefore, continue to keep positions on the light side.Â
No setups again tonight. If the indices break the
aforementioned levels, we could see numerous shorts setting up.Â
Best of luck with your trading on Friday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
“….. Your book on your swing trading method is succinct, straightforward, clear and above all useable. Thank you for the tools it provides. Please write more. You’re not just another writer, you’re a teacher who makes a difference…”
Michael S.
