Why The Indices May Have Dodged A Bullet
Looking to the indices, on Monday, the Nasdaq sold off hard
in
early trading. However, it found its low by mid-morning and began to rally. The
rally accelerated late in the day. It did give back some of its (earlier) gains
going into the close but still managed to close well.
 This action has it testing the bottom of its recent
trading rangeÂ
The S&P put in a similar performance.
This action has it tailing down and testing its recent
trading range and keeps it right at its 50-day moving average.Â
So what do we do? Monday was a tail (pun
intended) of two markets. In the morning, the indices were breaking down out of
their trading ranges and it was “obvious” that they were rolling over.
However, by the afternoon, they had recovered and it then appeared that they
have completed a successful “test”. Further, the VIX reversed
after hitting multi-month highs. This action triggers several CVR buy signals.
Therefore, based on this (both price and VIX action), it appears that the
indices could bounce. However, there’s no reason to bet the farm just yet since
we still remain in a trading range.
No setups again today tonight (Monday). Aggressive traders
may look for a bounce trade in the index shares.
Other
In case you were wondering, I’ll do an update on the recent
money/position management example using Healthnet
(
HNT |
Quote |
Chart |
News |
PowerRating) on Tuesday.
Best of luck with your trading on Tuesday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
“…..And speaking of your book and articles, I have learned more from you than any other traders I have studied thru the years. Your writing is so easy to understand. And your setups actually make money!! I use your trend qualifiers, simple pullbacks, TKOs, trend pivot
pullbacks, and bow ties to trade the futures markets……. I’ve had your book for almost a year, and I still read it often.
….”
Lin S.Â
