Why You Should Continue To Stay On The Sidelines
Looking to the indices, on Tuesday, the Nasdaq rallied
early but quickly found its high and began to chop back and forth. It began to
sell of by mid-day and generally worked its way lower throughout the rest of the
day.
This action has it closing poorly and puts it back below
its 50-day
moving average (the red line below). It’s important for this index to prove that
it can make it past overhead resistance in the 2100 range, otherwise a potential
top (or at the least, a longer-term wide and loose trading range) could be
forming.
The S&P also sold off after chopping back and forth.
So what do we do? Once again, as I’ve said recently, I
like to take the markets one day at a time. This is especially true for when an
index such as the S&P is stuck in a trading range. So let’s recap, yesterday
I was encouraged by the fact that it tried to break out. However, on
Tuesday’s it came back right back in. Therefore, so far, since we remain in a
sideways market, continue to take it one day at a time.
Yet again, the database continues to generate very few meaningful
setups. And once again, this makes sense since the market (especially the
S&P) remains stuck in a trading range. Therefore, continue to wait for a decisive
breakout (or break down) before looking to establish new positions.
Best of luck with your trading on Wednesday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
P.P.S. My new 20-hour course is now shipping.
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