Quick Summary:
Lots of meaningless bounces or holding the line today. We continue to watch the 5 categories of stocks and sit on our hands for the most part, occasionally taking a stab at a position. I added BWLD today.
The Market
Key SPY Pivot Levels: 198.20 : new high resistance, 195.52 20 dma, 191.84: 50 dma and old high
Under the Hood and Trading Game Plan:
If you have not already, please read yesterday’s Report, along with the update with stocks. It still very much applies.
SPY and QQQ held the 20 dma today, and did little else. IWM held yesterday’s down bar (it already broke below the 20 dma). There were some bounces in stocks today, but nothing constructive that tells us what is ahead. Was it a minor bounce before a pullback resumes, or will the market resume the uptrend? We can’t tell right now. We continue to watch and wait, occasionally taking on a small position that looks attractive.
Current Trades
I am currently holding DUG and short AAPL. I entered BWLD today.
Here is a copy of the BWLD alert:
I am taking another shot at BWLD here. Seem to be reacting well at 20 dma and breakout bar. Stop around $157, target $166-168.
I consider any trades right now speculative–must understand probability of success is not as high as normal for this setup. I have reduced positions size–125 shares total at average price 159.66, risking $322 which is .29 percent of account.
Here is the Trade Journal. YY, AAPL and BWLD entries still need to be added.
The Focus List
We are doing the focus list a little differently for the time being. Here are the stocks being watched in different categories as the market shakes out. Noting significant today as most bounced slightly with the market, except in the reversals/hammers category. These airline stocks all gapped up as expected, and for the most part held the gaps.
1) get extremely oversold and near major support for bounces (rubber band setup)
I am not just looking for oversold readings here, I am looking for extremes. We are not there yet on most of these. There needs to be more selling, price nearing important support levels, and extreme readings. At that point we increase the probability of a bounce. If SPY can pullback to the 50 dma (see chart below), a bunch of these will setup.
GWPH, IPXL, KS, EZCH, Z, TWTR, YY, Z, TSLA
2) stocks and sectors that are holding up well (possible rotation or new leaders)
Energy, metals, gold, silver, apparel
BKS, FANG, PTRY, BWLD, CTRN, TAP, CODE, GMCR, X, FCX, XOM, COP, CZRO, NOV, CLR
3) stocks that reverse off big down days intraday (hammers)
4) Select shorts
5) Pullback shorts (bounce to resistance after big drop–often was a rubber band trade)
We need to wait and see for this list. Many will come from the stocks that bounce after extreme drops. Big Drop – – -> bounce – – -> short setup if bounce on weak volume and price action
I usually don’t add the breakouts/breakdowns that I am watching to the focus list until it is close to entry, but since we are playing the watching game right now, here are a few that I am watching develop.
Market Leaders
These are stocks that I always watch, though they might not be in my tradeable watchlist, nor are they actually always leading the market.
Lots of meaningless bounces or holding the line. The healthiest action was in FB.
Please read the post 23 Laws of the Part Time Swing Trading the Market Speculator Way. It is important to know these rules if you trade off the Report.
New subscribers and trial members please leave me any feedback/comments in the comments, via email (singhjd1@aol.com) or twitter (twitter.com/PaulJSingh)
