Trading is a lot like life. You have to take things one day at a time. On Thursday, the Ps bounced to hover just below the 1700 inflection point—appearing to stabilize.
Today’s another day though. Futures are very weak pre-market, so it looks like they will drop well below 1700—at least on the open.
Unfortunately, the weakness will keep the index well below its August peak—which is just north of the May peak. So, again, net net, we haven’t seen much forward progress here in over 4 months—draw your arrows.
As you know, the Ps have taken out their Fed day low. So again, this reminds me of Monday’s “write that down” moment:
“I ignore all news but I do know when a market rallies on good news but then gives up all of its rally it suggests that that news has been quickly digested. If fact, there are trading strategies based on such news reversals. You look to buy after bad news and sell after good news (write that down).”
Looks like they guy who told me how worthless my column is quit reading me one-day too soon, but I digress.
The Quack had a decent day and is just shy of multi-year highs. So far, its recent breakout remains intact. Unfortunately, it too will likely get hit-at least in early trading.
In general, things have been mixed as of late. I suppose this is no surprise with the Quack looking okay and the Ps looking somewhat dubious.
As you would imagine, with the Quack near new highs, most of the buy side setups are in technology. Outside of tech, selected Metals remain constructive.
On the short side, I’m seeing setups in big cap stocks that have recently hit new highs and have begun to roll over.
So what do we do? The plan still remains essentially the same. Continue to take things on a setup-by-setup basis. It’s not a throw a dart type of market. You have to pick your spots very carefully. On the long side, if you REALLY like a setup, then take it. Just make sure you take into consideration this morning’s weakness. Wait for entries. No trigger, no trade. That simple rule has kept us out of quite a few stinkers as of late—see Thursday’s chart show for yet another example of this. On the short side, keep an eye on setups in the aforementioned big cap issues.
Best of luck with your trading today!
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