Wrong This Time?

  • October 2, 2001
  • Dave Landry

On Tuesday, the Nasdaq rallied early and then
drifted into the Fed announcement. Then, after initially selling off,
rallied back to pre-announcement levels.

The index continues to form a low-level
consolidation/pullback. The recent highs, circa 1530 look like
resistance to the upside with the old lows, circa 1400, a possible
target to the downside.

 

The S&P rallied
late in the day to tack on a decent gain. It continues to outperform
the Naz.

 

So what do we do? 
As you know, when playing pullbacks you will be wrong when the trend
finally ends. And judging by the continued strength in the S&P,
one has to begin to wonder if this is that time. On the other hand,
the Nasdaq has yet to show any meaningful strength. Therefore, in
light of such mixed performance, you might consider nibbling some on
the long side but only if you get entries. Just make sure you have a
chair ready for when the music stops as the big blue arrows still
point down.

Looking to potential setups, the banks remain
strong but still look like they could roll over from a pullback from
lows. With that said, Comerica (CMA)
and Northern Trust (NTRS),
both  mentioned recently, still look vulnerable.

 

Boise Cascade (BCC)
in the weak consumer non-durables/papers looks poised to continue its
meltdown out of a pullback from lows.

Best of luck with
your trading on Wednesday!

Dave Landry

sentivetradingco@prodigy.net

P.S. Reminder: Protective stops on
every trade!

P.P.S.
I look forward
to meeting you this
Friday at TM2001.
Don’t hesitate to register, because in addition to showing you
every important variation on pullback setups, I’ll also be teaching
you my favorite new techniques
including: how to capture trends before the crowd using
“transition in trend” patterns
and how to ride huge momentum off false moves…both
to the long and short side.

“…Your
book was the best. I’ve read dozens of stock market books but when I
finished yours, something clicked. Thanks for writing it and your
column and I’ll see you in Vegas….”

Regards,

Dave (aspiring trend following moron) 

 

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