Remember: trading is a 2 way street. A trader isn’t scared off by a shaky market. Quite the opposite: a trade gets his knives out and looks how to trade the downside. You can make as much money when things go down as you do when things go up if you know what to do…
For reasons outlined in last Friday’s edition, the market doesn’t look too happy here. Who knows though? Things have become so silly that just a smile from the Fed chairman as he stands next to a printing press could change all that, but the usual bounce people have been trained to expect hasn’t happened yet, and both the S+P and Dow are still residing under their 50-day average (all charts from Stock Charts.com):
The longer something stays below its 50-day average the greater the chance of the descent continuing. So that’s the first chart to keep an eye on this week. Failing a swift bounce back up past 1660, its time to look for shorting opportunities…
Here’s a couple of ‘dog’ charts on my radar this week:
After collapsing from the mid-sixties, Expedia is caught in a channel between $46 and $52. It keeps knocking on support at $46, A break below support and it’s in trouble.
There’s a lot not to like about JOY, and the chart furthers the case. If support at $48 gets broken, watch out below. I’ve pointed to massive selling volume this last week- is this institutions dumping their trash during the recent market turbulence?
Of course, the opposite could happen. If the Fed gives us a nice wink (again), and the market bounces, a break out above for these two laggards might happen. That’s why we only set trades to trigger if they break below, NOT before.
