The Song Remains The Same

On Monday, the Nasdaq opened lower but quickly reversed. However, this rally was short-lived as it sold off hard for rest of the morning. By mid-day it began to rally but this too fizzled. It then chopped lower for the remainder of the day.

The S&P also sold off hard to close poorly.

The VIX stretched further away from its 10-day moving average as fear increased. Once again, this action suggests the market has the potential to bounce.

So what do we do? Well, the song remains the same. Obviously the market is "even more" oversold. So, as mentioned Friday, it's "really really" too late to establish new shorts. Once again, see recent commentaries for my canned oversold speech (I'll spare you longer-term readers). As usual, in a situation like this, the best thing to do is to continue to scale out and/or trail a stop on existing shorts.

The Holy Grail (continued)

On Friday I mentioned that my recent Trader Talk focused on the importance of using sectors. And even more importantly was to trade stocks within a sector when the sector itself was set up. The recent examples were oil service ($OSX.X | Quote | Chart | News | PowerRating), mentioned Thursday and defense (mentioned in my trading service). Notice how both continued to follow through on Monday. As you can see, it pays to put the sector behind you, especially when it is set up.

Best of luck with your trading on Tuesday!

Dave Landry

sentivetradingco@prodigy.net

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

P.P.S. Starting tonight, no more shameless promoting of my book!

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