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Quick Summary:
SPY within range but weakness in IWM, USO and momentum stocks is a concern. Key sectors EDC, INDL, BRZU, RETL, IBB. New retail focus list along with 17 focus list stocks. USO rubberband setup.
Video
Note: I highly recommend that you watch the video if you can, rather than just read the notes. I talk about strategies, entries and exits more in depth in the video. I try to make them short and to the point with little non-essential information.
Indexes and Game Plan
While SPY pulled back ever so slightly on Friday, IWM was hit hard. The fact that small cap IWM was hit hard at overbought levels, combined with negativity in momentum stocks and the impact on the market of the oil free fall increases the odds of a pullback. However, we also have favorable holiday/year end seasonality.
The game plan continues to be stay away from trading the major indexes, but still focus on strong setups in individual stocks. Look for favorable reward to risk. We are also watching sector ETFs in emerging markets, and possible energy rubber band bounce setup.
IWM has formed a large cup and handle like formation. A pullback to the 20 dma, or breakout sets up a late year seasonality entry.
Today’s Trades
I am holding BITA (partial position after profit taking) and Z, and entered BABA on Friday.
Sector Watch
They key sectors we are watching this week are Retail, Biotech, Emerging Markets/India/Brazil and oil/energy.
RETL,USO,XLE,EDC,IBB,INDL,BRZU,NUGT
Biotech and retail are leading the market. We use this info to find setups or trade the index.
Retail
Oil/Energy are in free fail and it will be time to think about the oversold/rubberband setup. Watch the videofor *educational* review of this setup.
Emerging markets are in consolidation after breaking out and may provide good entry levels.
Breakouts
I am keeping a close eye on high tight flag setups TQNT, AMED, BWLD and TTWO. No current entry levels.
With earnings season coming to an end, we continue to watch the attractive earnings breakouts we collected. The good ones are forming ranges and some will become the next momentum players.
TTWO, CALD, COUP ACHC,RFMD,ACCO,AMED,X,TQNT,AN,TRNX,MSG,RCPT,VDSI,BCOR,CATM,BWLD
Focus List
Retail leads the market. While we watch the leveraged ETF, I will also watch the following for good entries. Some are new to the focus list and some are not.
NILE,TIF,SIG,OUTR,HABT,GES,MUSA,ARO,ULTA (see video for entry specifics)
Focus list stocks to key in on (see video for entry strategy)
BITA,TSLA,Z,MNST,SOHU,COUP,SPLK,CYBR,POT,PTX,LMT,MEG,BIDU,GWPH,BABA,VEEV,WUBA (see video for entry specifics and key stocks to start the week)
While we can easily play the emerging market leveraged ETFs (EDC, INDL, BRZU), there are some nice looking setups in stocks as well. Here is the list: BRFS,TSU,INFY,BBD,CBD,ABEV,VIV,BVN,BAP
Please read the Education Archive and posts 23 Laws of the Part Time Swing Trading the Market Speculator Way and How to Analyze Your Swing Trade Results It is important to know these setups and rules if you trade off the Report.
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(twitter.com/PaulJSingh)
