Why You Should Remain Concerned About The Action In The Indices
Looking to the indices, on Tuesday, the Nasdaq lapped higher
on the open but quickly found its high and began to sell off. It then chopped
its way lower throughout the rest of the day.
The S&P put in a similar performance.
Looking to the sectors, the intra-day reversal in the
Nasdaq has a lot of tech stalling just short of new highs.Â
On the downside, the homebuilders were creamed. This action
further suggests that a top is in place hear. The utilities were also hit hard.
This action suggests that they have topped and have the potential to continue
lower out of an inverted cup and handle.Â
So what do we do? The action in the indices
continues to concern me. The fact the Nasdaq can’t seem to hold its new highs is
somewhat troubling. However, once again, what’s more concerning is the fact
that the S&P has stalled out at the top of its trading range and remains
stuck in that range. On the bright side, after the close Intel announced
better-than-expected earnings. One has to wonder though, if this, in and of
itself, will be enough to get the indices going again. Therefore, you might want
to be cautious about buying the open–just in case we see an opening reversal.
And, once again, no matter what you do, you might want to continue to keep positions on
the light side until the S&P breaks out of its trading range (one way or the
other).
No setups tonight. Once the S&P breaks out of its
trading range, we will likely see numerous setups.
Best of luck with your trading on Wednesday!
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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