morning folks. futures slightly higher this morning with the spy gapping up .2% so far. slv, uso, gld all down. Last week was an easy week to trade for the most part. We often talk about “follow through” when we break supports and resistance areas. In the past as we dipped thats the one thing we would never get is “follow through” well we got that and more last week as we started below major support levels and kept knifing lower and lower. Even getting an attempt at a relief bounce on thursday we couldnt keep any of the gains. usually when that happens its pretty obvious that the market wants to go lower. This week we are getting to some key levels of support where the market could potentially bounce we have 2 layers of support with s&p 1250 and the 200dma moving average underneath. We are starting to get to some levels where shorting doesnt make sense anymore except on a daytrade level. I have partial positions on the shortside in tecd, sgi, hrbn and will look to cover them today. The market is playing chicken with our politicians we might be trending down till bernanke or someone in washington blinks and gives them what they want. A few things im watching for is a bounce around these levels the bullish scenario would be nice follow through with run back towards s&p 1300-1315. If we get a weak bounce and make lower highs without a significant breadth thrust that will give us a prime opportunity to load up shorts. Worst case scenario is we we just chop around at this level going sideways relieving these big oversold conditions that to me would be a sign that the market is going to tank much further. In the end the marke is down only 7% from its highs (thats nothing after a near 100% run). The selling has been consistent but measured. If your playing its good to have a mix of longs and shorts that can work whether the market is up or down. It seems on the longside you have to stick with the big volume momo names that traders will pile into you can see zagg, jva, ors there are stocks that traders will eyeball and they tend to run them up pretty hard. On the otherside there a whole host crappy stocks you can short with minimal risk (check out @mb_willoughby she has been shorting nonstop last 3 weeks 2-3 stocks a day and having almost 100% results on them). In the end im looking for just one more thrust down and then ill look to get aggressivly long for a trade…ideally i’dl love to see a breach of the 200dma and then a thrust back up through it.
hatip to @szaman who was on fire last week he called out 3-4 plays that went up 20% in chat during the week. he is a cool dude
stocks im watching