A Few Thoughts Before the Open:
In looking at the charts from yesterday’s trading activity of the individual stocks I have the following thoughts:
- Everything has a negative chart pattern. This doesn’t mandate an end to the world, but don’t confuse a “dead cat bounce” with a market rally.
- Many charts showed an oversold pattern, so we may see a couple of days of rebound before moving back lower.
For today I am looking for stocks with negative chart patterns, and are not over extended. I am looking to write a covered-put position where the breakeven point is above the resistance point and our subsequent would be stop loss position if we were doing a straight equity trade.
Don’t forget that despite ADP did reporting higher job additions, Challenger also reported higher than expected layoffs.
We might see the Dow Jones Industrial Average rally to its 200 day moving average which is currently at 11,944.35