Why You Shouldn’t Chase The Market Here
On Friday, the Nasdaq gapped open but immediately began to
sell off. It found its low by late morning and began to rally. After making
marginal new highs, it began to sell off again. However, it reversed late in the
day and rallied to end up just about where it started.
The S&P was more impressive. This action puts it just
above its 200-day moving average.
So what do we do? As I’ve said before, aside from
market timing systems I follow which can be contra-trend (see
last
Wednesday‘s archive), as a momentum player, I will be wrong at market bottoms
and tops. This is one of those situations. And, I’m OK with that. It’s what
happens after the first pullback that will interest me. Many sectors now
appear to be making transitions higher. These include (but not limited to)
biotech, retail, Internet, drugs, broker/dealer, semis and even the transports.
However, until they correct, I see no reason to chase this
EXTREMELY
overbought market higher.
No setups tonight. Remain patient. We could see a plethora
of setups after the market corrects.
FYI, my video
is now 10% off (the price, it’s still 100% intact).
Best of luck with your trading on Monday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
“….your book is like an investing bible to me, and I thank you very much for writing in a simple straight forward style that even a novice like me can use….”
Thanks Much,
Cliff A.
