Chasing Your Own Tail

On Friday, the Nasdaq lapped sharply higher and generally worked its way higher throughout the day. It did sell off going into the close but this wasn't enough to keep it from closing well.

The S&P also put in a decent day.

So what do we do? Up sharply one day, down sharply the next. This is the type of market where you have to be extremely careful not to "chase your own tail." For me it's easy, just sit back and watch. I know that follow through is key for my methodology. And lately, we really haven't had too much of that. Even when we do, it's so choppy intra-day that I know my stops would have likely been taken out anyway. So I sit and wait. What will get me to take action? A lot of sectors are at or near multi-year lows. If they take out these lows then I'll be ready to short. If they have some sort of miraculous recovery, then I'll be ready to go long on the first pullback. For now though, I continue to sit on my tail.

No setups tonight.

Best of luck with your trading on Monday!

Dave Landry

sentivetradingco@prodigy.net

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