Wrong This Time?
Each evening we focus
on the most interesting aspects for the upcoming trading
day. The comments are based on observations of the nightly
updates of the Stocks/Sectors and Market Bias pages. They
are provided for educational purposes only and are not
intended to be direct trading advice. Also, keep in mind
that these remarks are made up to 12 hours in advance of the
market’s opening. Therefore, overnight events may alter the
outcome of these observations.
On
Thursday, the Nasdaq lapped slightly higher, dipped and then mounted a solid
trend day higher. This action has it closing just above its 50-day moving average (a)
for the first time since early September of 2000.
If the Nasdaq can hang out around these levels (at or above the 50-day moving
average), it’s possible that a bottom could be forming. And, I’d be wrong, as I
said I would be, in calling another pullback from lows. For now though, it
remains an
overbought market in a longer-term downtrend.
Obviously, when you add on another up day to an
overbought market, it becomes more overbought. However, this is no reason to run out and get short. Therefore, don’t fight the tape–wait for a
reversal before attempting any new shorts. Also, keep in light on the longs just
in case the correction kicks in.
Tonight (Thursday) was another one of those nights where it
was difficult for me to find decent setups. And, once again, after trying and
trying, I gave up and realized that the database is talking to me. I think the
best thing to do in this situation is to be patient and wait for better setups.
With that in mind, here’s all
I found:
Nike
(
NKE |
Quote |
Chart |
News |
PowerRating), on the Pullbacks
Off Highs List, looks like it has the potential to resume its strong
uptrend.
On the short side and for you breakout
players, Teva Pharmaceuticals
(
TEVA |
Quote |
Chart |
News |
PowerRating),
mentioned recently, is just shy of taking out its 3-month low.
Best
of luck with your trading on Friday!
P.S. Reminder:
Protective stops on every trade!
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