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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Johnny Canuck who wrote (37565)	7/11/2002 1:30:44 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 68330

July 11, 2002 On Wednesday, the Nasdaq opened higher but immediately began to sell off. And, in general, it continued to sell off throughout the day. This action has it closing poorly and at five-year lows. The S&P also sold off hard. This action has it closing near multi-year lows. The "good in the bad" is the fact that the VIX is now more than 10% away from its 10-day moving average and its low is greater than that average. In other words, it's a CVR-III buy (a system I co-created with Connors). The system is about 70% accurate in predicting a change in market direction over the next three to seven days. The advantage of the system is that it tends to lead the market. The disadvantage is that it tends to lead the market. Therefore, I use it as a "get ready." A sign to trail stops on shorts/take partial profits and prepare for a bounce. So what do we do? This is the time where I give my patented "Damned if you do and damned if you don't" speech. If you try to short this late in the swing cycle, the market will bounce. If you try to buy, oversold will become more oversold. Therefore, (assuming you have been following the big blue arrows) look to scale out of shorts and trail stops. Looking to potential setups (in case you ignored what I just said), Electronic Data Systems (EDS), in the weak software: information service sector, still looks poised to resume its meltdown out of a Trend Pivot Pullback. Best of luck with your trading on Thursday! SEARCH by Dave Landry, Director of Research TradingMarkets.Com