By: Scott Redler
If you play by the right rules you can take advantage of times like this. Yesterday we tried to push through 2010 lows but reversed back above, an outstanding buying opportunity. The market drifted higher the rest of the day to close the sizable gap. We are seeing some nice follow-through this morning on those buys from yesterday.
The S&P for now has a potential double bottom, and now we will measure strength each day to see how far this bounce can take us. The next area to watch close will be if we can reclaim the 200-day MA. If this pattern is only an oversold bounce, then we will take the trade when weakness returns in earnest.
Again, we have a list of go-to stocks that have held their upper ranges while the S&P has broken through lows.
AAPL
BIDU
VMW
SNDK
NFLX
AMZN
The banks led the way yesterday. GS is opening this morning above its downtrend, and whether it can hold the 143 area today will be important.
I bought some casinos yesterday and will sell half off the open. They are trading well with the market.
Watch BP today, maybe they can plug that hole.
I already sold half my longs from yesterday and will hold half with trailers to see if it continues.
Don’t chase rallies and buy the excitement.
