Why You Need To Pay Attention To More Than Just The Indices

On Thursday, the Nasdaq chopped back and forth in a narrow

The S&P finished its choppy day on the downside. It
closed below its recent trading range and at multi-month lows.  

Although it isn’t so obvious in the indices, there remains
a lot of selling “underneath the surface”.  This is true for a
lot of individual issues but is also true within the sectors themselves: The
banks are rolling over from multiple tops. Broker/Dealer and other financial
stocks all appear to be making another leg lower. The HMOs appear to be breaking
down. Insurance has been hit especially hard as of late. Previously strong
sectors such as the generic drugs now appear to be in the early phases of
forming a top. Further, bear market “safe havens” such as consumer-non
durable and the major drugs are also in downtrends. 

So what do we do? Based on the above, the trend remains
down. However, in case I failed to mention it lately, the market remains choppy.
I am encouraged that the S&P is trying to break out of its range but I see
no reason to get too aggressive just yet. Therefore, once again, the obvious play is to
continue to focus on the short side.   

No setups tonight. We could see numerous setups soon if the
S&P has a decisive breakdown followed by a pullback. Also, especially weak
areas such as the aforementioned  insurance could set up on the next

Best of luck with your trading on Friday!

Dave Landry


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

“…. Great book, clear and concise….”



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