Why You Might Want To Wait Until Next Year Before Buying This Market
Looking to the indices, on Tuesday, the Nasdaq chopped back
and forth in a narrow range but did manage to close on a high note. This action
was enough to keep it (slightly) above its recent trading range and at new highs for the year.
The S&P also also chopped back and forth but ended flat
on the day.
So what do we do? I really hate to read too
much in pre-holiday trading, especially on a narrow-range choppy day. With that
said, the song essentially remains the same: The strongest areas (longer-term)
still remain cyclical stocks including chemicals and commodity related
stocks such as energy and metals & mining. And, so far, the market
remains overbought. Therefore, on the long side, you might want to tread
lightly on new positions especially since trading will likely be thin and choppy
on New Year’s Eve. Once again, probably the best course of action is to continue
to manage existing positions (e.g. trail
stops and take profits if offered) vs. establishing new ones.
No setups tonight. If the indices have an orderly pullback,
we should see numerous setups soon.
Best of luck with your trading on Wednesday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
P.P.S. Learn my 10 best swing trading patterns and strategies in my new book.
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