Missouri Market

On Thursday, the Nasdaq lapped higher and then headed lower. It found its low late in the morning and then chopped its way higher. The good news is that the buying accelerated going into the close.

From a psychological perspective, Thursday's action is a major positive as the recent lows held and it makes back much of Wednesday's losses. It also puts the index back above its 50-day moving average. However, follow through will be key.

 

The S&P also had a decent day. It remains below its 50-day moving average. 

 

So what do we do? I'm encouraged by the magnitude of the the reversal and by the fact that I have some market timing systems triggering buys, namely the TRIN Reversal. This signal is occurring from a multi-month high of the three-day average TRIN reading. And, in my experience, these signals tend to be stronger than shorter-term signals. However, this market has been so choppy lately, I think I'm going to take more of a show-me approach. Therefore, look to trade the long side, but wait for entries, and don't bet the farm.

Looking to potential setups, IONA Technologies (IONA), looks like it has the potential to rally out of a Running Cup and Handle.

 

Best of luck with your trading on Friday!

Dave Landry

sentivetradingco@prodigy.net

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

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