Category Archives for "Random Thoughts"

By Dave Landry

To The Markets

The Ps (S&P 500) triggered a volatility "fakeout" and busted out to all-time highs (see the latest Dave Landry's the Week In Charts for more on the pattern)--so far, so good. So, is this the all-clear? Well, it's a short-term pattern so there's no guarantee that the move is sustainable. It certainly is a positive development overall though. As a trend follower, you should NEVER argue with new highs, especially all-time highs! 

The Quack (Nasdaq) managed to close at all-time highs too! Let's not start kissing each other just yet but, like the Ps, it certainly scores as a positive. As usual, follow through will be key. Ideally, I'd like to see it clear its prior highs decisively and not look back for a while. As usual though, take things one day at a time. 

The Rusty (IWM) wasn't so rusty on Friday. It gained nearly 1 1/2%.  This action puts it at 1-year plus highs. It still has quite a bit of overhead supply to overcome but so far, it's cutting through it like butter. 

The rally is fairly broad based with many sectors following suit. I especially like the fact that Technology, with the notable standout of the Semis, is "all in" for the ride. 

The Metals took it on the chin on Friday but I wouldn't count them down and out just yet. I haven't done my evening analysis yet but I'd be willing to bet we'll see some TKO setups here. 

So What Do We Do?

Well, as a pullback player, we won't see a plethora of setups until the market pulls back. Sometimes it is tough watching markets go by because they don't fit your methodology but that's exactly what you should do--whatever your methodology dictates. You can't decide to shift gears and become a breakout player just because the market is breaking out. In markets, you have to resist the urge to join the "church of what's happening now." Let's see if the market can continue to follow through. Don't worry about being left behind. If this IS the real deal they'll be plenty enough time to get on board. In the meantime, focus on the Metals and more speculative issues such as IPOs. The great thing here is that timing the overall market is much less crucial. Regardless of what you do, if you are blessed with a swing trade profit then lock in half and then trail your stop loosely just in case it turns into the mother-of-all trends (note: this article was originally associated with ​this column on trailing stops).

Well, as a pullback player, we won't see a plethora of setups until the market pulls back. Sometimes it is tough watching markets go by because they don't fit your methodology but that's exactly what you should do--whatever your methodology dictates. You can't decide to shift gears and become a breakout player just because the market is breaking out. In markets, you have to resist the urge to join the "church of what's happening now." Let's see if the market can continue to follow through. Don't worry about being left behind. If this IS the real deal they'll be plenty enough time to get on board. In the meantime, focus on the Metals and more speculative issues such as IPOs. The great thing here is that timing the overall market is much less crucial. Regardless of what you do, if you are blessed with a swing trade profit then lock in half and then trail your stop loosely just in case it turns into the mother-of-all trends (note: this article was originally associated with this column on trailing stops).

May the trend be with you!

Well, as a pullback player, we won't see a plethora of setups until the market pulls back. Sometimes it is tough watching markets go by because they don't fit your methodology but that's exactly what you should do--whatever your methodology dictates. You can't decide to shift gears and become a breakout player just because the market is breaking out. In markets, you have to resist the urge to join the "church of what's happening now." Let's see if the market can continue to follow through. Don't worry about being left behind. If this IS the real deal they'll be plenty enough time to get on board. In the meantime, focus on the Metals and more speculative issues such as IPOs. The great thing here is that timing the overall market is much less crucial. Regardless of what you do, if you are blessed with a swing trade profit then lock in half and then trail your stop loosely just in case it turns into the mother-of-all trends (note: for reference, this article was originally associated with this column on trailing stops).

Dave Landry