MarketWatch.com said it best..
“Thursday’s releases — initial jobless claims, leading economic indicators and the Philly Fed index — were only the latest in a series of reports showing the economic momentum flagging. Of this week’s indicators, only one — industrial production — showed any growth, and that was due to special factors unlikely to be repeated. “
What can we do in a situation like this? The simple answer is to sit on the sidelines.. but, what fun is that? There is money to be made in this market – you just have to play what’s given ya and don’t fight the trend. Also, you gotta realize that trends are very short lived these days and often change over night. How many stocks are you swinging for Friday? Are you comfortable with that number? I’m keeping the number small, for now. Hell, just look at the SPX – The last few months look more like an EKG than a market with any direction. Intraday scalps are still my best friend and will be until further notice.
Headed into Friday there are two things I’m looking at.
First, and thankfully, news should be light. The economic calendar is pretty dry. That’s kind of unusual and puts us in an awkward position.. we’ll have to actually trade the stocks and not the news.
I’ll also have my eye on the charts. I feel like we’re in a very precarious position right now with WAY too many stocks sitting on support. I don’t like to see top liquid stocks all sitting on support at the same time. If a few drop, they could all cascade down and then we see a massive sell-off. Considering the size of today’s move down, I don’t expect that kind of move tomorrow. However, we’re still on the edge and we could continue to drift to the downside if shorts start coming in under support levels. We shall see.
Here are a few charts I’m watching tomorrow –
EMC – SMA200 support swing setup.. This is a ‘relatively’ low risk trade if you’re looking for swing. Ideal entry would be as close to SMA200 as possible with stop just under. There is a lot of upside potential… especially if it moves through SMA100.
MMR – I like today’s volume and MACD positive move on tight consolidation. Worth a watch, but it has seen a lot of up days. Might want to consider move above SMA200 to minimize risk.. on watch.
VHC – I’m watching for a move above 6.50 on ascending triangle setup. I like the recent volume.
Others to look at that tend to maintain a bullish direction and exhibit support levels:
SVM – Watching against SMA100. A move above could offer a long entry.
VMW is an animal. Look for entries on pullbacks to around SMA70 and make sure nothing has changed in the business. That would probably offer your next long swing opportunity. Or, you could look for a breakout to new highs above 82.
RSG – Likes to bounce of SMA200. Look for support levels like these for possible good entry points for swings and stops.
See you in the boom factory.