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

To: Johnny Canuck who wrote (37889)	7/31/2002 10:59:33 PM
From: Johnny Canuck	Read Replies (1) \| Respond to of 68216

Trading Ideas by Dave Landry, Director of Research TradingMarkets.Com August 1, 2002 On Wednesday, the Nasdaq lapped slightly lower and continued lower early in the morning. It then worked its way higher but began to sell off again early in the afternoon. However, late in the day it began to rally but this wasn't enough to put it in the plus column. Said another way, it was choppy. Once again, it still appears to be bumping up against an area of overhead resistance. The S&P put in a similar performance except that it managed to close in the plus column. So what do we do? Once again, I still think that the market remains vulnerable. The reasons are essentially the same as those given on Tuesday: All major indices remain set up as pullbacks from lows. The market is overbought. We have sell signals beginning to trigger (e.g. CVR-III) and could get additional sell signals soon (e.g. a CVR-III Modified, a TRIN Reversal and a Oscillator Swing System). And finally, nearly all sectors (with the notable exception of biotech) are set up as pullbacks from lows. Therefore, continue focus on the short side but wait for entries (just in case) and keep it on the light side based on recent volatility. Looking to potential setups, Chubb Corp. (CB), in the weak insurance sector still looks poised to resume its strong downtrend out of a deep pullback. Email Of The Day Dave, I worked through all the service files and it was a very interesting experience. Several things I learned: 1. The Big Blue Arrow is indeed King! Most trades made against the long-term trend failed and those made with that trend were winners. 2. It is important to give the trade some room to breathe with a wide enough stop to give the trade a chance to get going. 3. It is also important to lock in some profit when you get near or hit your first profit target. Once you take some off the table, the "heat" is off and the stress factor lowered. At that point, you are now playing with the markets money and not your own once you move your initial stop to breakeven or trail it behind your target. 4. If you are willing to use a fairly loose trailing stop on the remainder of your shares, you have an opportunity for a home run. AOC wasn't only a homerun, but a Grand Slam because of giving it some room to move around. 5. Things are beginning to get too easy on the short side. When the success rate is as high as it is on the picks from your service it seems to me that fairly soon this short-side party must end or at least get a little tougher to continue winning at such a high rate. 6. You are one heck of a stock picker! 7. Your service is a bargain if the picks in these files are indicative of your successful trades over a longer time frame such as a year. The more I think about it, to heck with a year. Trading these picks in June and July would have made my year! Ron C. I now know who I will get to write my column when I'm on vacation. Well said Ron, well said! Best of luck with your trading on Thursday!