Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Be Wary of Early Strength

By

Dead cat bounces along the way will happen and should not be trusted.

PrintPRINT



Good morning Minyans.

Wal-Mart (WMT) is being given the credit for this morning's positive open however make no mistake that the markets are in an intermediate downturn and very oversold. Dead cat bounces along the way will happen and should not be trusted. The early strength is begging to be sold however may last longer than a few hours simply because we are due for a bounce that actually has some gusto behind it, rather than these futile attempts we have seen over the last few days.

So, how do we play it? Unfortunately, we shouldn't. Unless you want to venture in for a short term day trade, looking to play a bounce in this tape is risky business. Should the bounce come on light volume, the best course of action may be to look for short side candidates that could continue to fall should we reverse and head lower. The Oil and Gas names look very vulnerable and would be the first place in which I would look. Stocks like Halliburton (HAL), Baker Hughes (BHI) and Cameron International (CAM) have all experienced sharp sell offs and may be due for an oversold bounce. I will be watching for ideal points to start average into the dark side on these names.

Gold saw a sharp sell off yesterday and I suspect will remain choppy for some time however a name I am watching to actually scoop up on weakness is Newmont Mining (NEM). This massive gold miner reported a stellar quarter and broke out of a consolidated multi-month base. They have since retraced back to this base and look ripe for a buy on weakness.

Despite what may look like a positive attitude on Wall Street, we must be very careful and view today's advance with a skeptical eye. We have a long way to go before we are out of the woods and it is going to take many sessions and bids that seem to be lost in the abyss.

Patience Minyans, patience.

<= p=" "><= p="">

 

PrintPRINT
 
Featured Videos

WHAT'S POPULAR IN THE VILLE