Quick Summary:
Continue to watch SPY pivot levels and range. Still holding BWLD and TSLA. A number of focus list stocks are near entry levels (both longs and shorts), and a few taken off due to blowing past entry levels. New additions FSLR (short), UIS and PII. Market leaders GOOGL and NFLX being watching closely.
The Market
Key SPY Pivot Levels: 198.20 : new high resistance, 196.76 20 dma, 193.67: 50 dma
Under the Hood and Trading Game Plan:
The day started with the possibility that the market might breakout out from the current trading range, but in the end it pulled back in just under the old high on putrid volume. The concerns we’ve had about a strong, sustained breakout still exist. There is a negative RSI divergence, the overall volume pattern is not strong and price moves have been short t the upside and strong to the downside.
This does not mean a move up can’t occur. The buy the dip mentality is still there. However, the odds of a strong move are low. I use this knowledge to be careful, lower position size and not make any aggressive bets. I have also been early to take profits, though I did stick with BWLD today despite it’s big move.
I am still looking for long setups in momo stocks that have pulled back are ready to bounce.
Current Trades
I am still holding BWLD and TSLA. BWLD bounced strong today, but did not hit my $160 target. I considered taking profits early, which I have been doing in this market, but decided against it.
The Trade Journal is up to date.
The Focus List
We can take BWLD, GWPH and TSRA off the table for now since they have moved too far from entry. All three can get back on after a multi-day pullback. FB has earnings coming up, so that is not tradeable yet. GMCR, Z, BKS, BLUE and CTRN are all within buypoint range. CMG pulled back from it’s highs. This one has a playable entry around $650 for a very short term swing. A good entry to stalk in the coming weeks is an entry in the $600-620 range as a fill the gap setup.
All of our short setups, except KS, are nearing good short entry levels. I am getting closer to considering a short entry from this list. Also, AAPL may be back on the table as a short depending on how it moves tomorrow. DAL reports tomorrow, so stay away.
New Addition:
Remember when we were hot on solar? Now not so much. FSLR broke down hard and is now weakly pulling back up to moving average levels. My concern here is that there is more room to bounce to the top of breakdown bar. However it may be worth a shot on another weak bounce.
UIS has a bottoming formation in play and possible gap fill as target. Entry on pullback to around $24.50-$24.80. Stop at $23.50. Target $27-29.
PII had a fantastic earnings breakout similar to CMG. There are multiple entry points. A pullback to $142.50 reaches the old high. $140 is the classic bottom of breakout bar. Longer term is a pullback to gap fill at $133. Stops and targets are dependent on strategy. If I take this trade, I will lay it out in alert. If you take it, make sure to get a 2:1 risk ratio with stop under one of the support levels.
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.
Outside of the stocks already on the focus list, GOOGL and NFLX are being watching closely. GOOGL as a pullback setup on gap fill, and NFLX as a possible short setup after a bad earnings reaction.
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).
