Thursday, March 11, 2004
Issue Contents:
| 09:21 | This Morning Headlines and reaction. |
| 09:29 | Stock Index Strategy $INDU, DIA, $SPX, SPY. |
| 09:39 | The Swing Trader Today's stock picks. |
| 16:16 | Active Trader Transcript Real time forum log. |
| 21:47 | SwingScanner Results Swing trade short list for Friday. |
| 21:51 | Volume Leaders NASDAQ, NYSE and AMEX. |
So, the headlines at Wall Street Journal tells all. Yesterday at the close:
(WSJ.com) - U.S. STOCK INDEXES hit new lows for the year Wednesday amid continued worries about valuations and the job market. The Dow industrials tumbled 160.07 points, or 1.5%, to 10296.89, while the Nasdaq composite slid 31.01, or 1.5%, to 1964.15.
Today at the open, following the explosions at three train stations that killed 173 people in Spain:
(WSJ.com) - Stocks are set to decline Thursday morning following deadly explosions at three train stations in Madrid. Markets in Europe and Asia fell.
We can see how worry translates into action, and now they are in the phase where things are looking bad, so they start blaming whatever is in the air for the market's malaise.
As usual, as we come to the end of the week, I am exhausted. Maybe it's a sign that it's time to move to the East Coast, after a lifetime to sleep deprivation in the Pacific time zone. The calendar is also broken on our website this morning, so please us the Month at a Glance view for now.
On Tuesday, we discussed the possible breakdown under the neckline, and now that it's done, they are all starting to panic because the sell button seems obvious. What we have to be careful of now, if a gap down on the open followed by a reversal back up into yesterday's low that will trap the panic sellers. We're looking for a bounce of a single day to try to position for some shorts on a swing basis at this point.
We measured the head and shoulders pattern on the daily Dow Industrials chart, and in yesterday's trading, it came within 50 points of the initial downside target already.
We've seen the panic gap down open, and while it might have more to go, the 45-minute intraday charts of the Dow Industrials and the S&P 500 are showing extreme ADX readings for the symbols and timeframes. At this point, I would be much more afraid of the gap and trap where panic sellers get it all done at the open, and then the market stages a recovery by trading back into yesterday's trading range.
My suggestion is that instead of taking the short sale candidates in yesterday's SwingScanner list and just shorting them on break of Wednesday's low, we ought to watch them bounce a little on the 10-minute chart to see if we can find a good clean bear flag before we enter any trades for DELL, JNPR, MXIM, LRCX and UNH.
For background information on our approach to swing trading, please visit the Swing Trading Principles section in the Knowledge Base.
Real time forum log.
Click on the title above to expand this document.
Potential buy candidates.
DHI
Potential sell short candidates.
JNPR
MXIM
DISH
LRCX
ADI
HMA
TTN
LYO
ARW
ODSY
IRF
TGT
MON
We will review the SwingScanner results along with the most active list overnight to see if there are any choice swing trade setups for tomorrow.