Why You Should Remain Cautious
Smoke ’em If You Got ’em
Dominion Resources
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PowerRating), mentioned
on Monday (a)–see archives, has moved nicely over the past two days (b). When blessed with such a nice, quick profit, make
sure you lock in half of your profits and move your protective stop to breakeven
on the remainder. This way, barring overnight gaps, you essentially have a
“free” position with the potential of it becoming a homerun
Looking to the indices, on Wednesday, the Nasdaq opened
higher but quickly found its high and began to sell off hard. It then chopped
back and forth for the remainder of the day.
The S&P put in a similar performance. It remains stuck
in a sideways trading range.
Looking to the sectors, the continued weakness in the Nasdaq
is keeping much of tech below its recent highs. Software sold off fairly hard.
As did Internet. Even the semis failed to rally on the positive Intel
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news.Â
On the downside, utilities continued to slide. This action
further confirms that a top is in place here.Â
So what do we do? My concern coming into today
(Wednesday) was that we would have a “pop up” opening based on the
positive Intel news (see Tuesday’s commentary). And, we did. This, combined with
the fact that most tech sectors remain below high-level resistance and the fact
that S&P remains stuck in a trading range is keeping me cautious. Therefore,
continue to keep positions on
the light side until the S&P breaks out of its trading range –or– at the
least, tech resumes its uptrend.Â
No setups again tonight. See above for reasoning.
Best of luck with your trading on Thursday!
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…”
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