SPY is still a buy on pullback, possible short on bounce if stochastics become overbought. New watchlist additions IWM and TOL. KORS and TWTR removed. TSLA on focus list, but now we know direction. The rest of focus list: AAPL, LNKD, WOOF, YELP, GMCR, GS, and EMES. GLD short setup. Stopped out of TWTR and KORS today. Holding YELP and WOOF.
Key Pivot Levels: 196.05: new high resistance 188.90: 50 day moving average 181.31: recent low 181-184: plenty of buying in this range.
Under the Hood:
Little has changed over the past few days. The market is in a holding zone, and for us in no mans land. We need it to either pullback or head higher before making a move with SPY. Volume continues to show distribution, with the big volume days reserved for down days going all the way back to March. That does not preclude so more drift upward, but eventually there will likely be a fall and we should be ready.
Trading Game Plan:
In the more immediate term, we could see a pullback to strong support at $190. That is an entry area. I will take a low risk short entry if we near $196 and stochastics become overbought again. This would have to play out over a few days, since it will take time to get back to overbought conditions. So do not expect a short setup tomorrow or even Wednesday.
Focus list stocks can be played according to setup without regard for the market.
The Focus List
While IWM is a market index, today it is in the focus list. It has formed a range above $115, and unlike SPY it has a strong recent volume pattern. An entry on pullback between $115-115.50, with a target at $119-120 and stop around $114 offers 4:1 reward to risk.
Note that I will likely us TNA for the trade. It is leveraged approximately 3X. For those not familiar with leveraged ETFs, take a look at the two charts. While the charts look very similar, IWM was up .48% today and TNA was up 1.28%. It makes little difference which you trade in terms of setup. You must decide if you want to take on the added volatility.
KORS is off the focus list. It was hit hard today (I was stopped out). TWTR mounted the 50 day ma and is also off the list as a short.
TSLA was on our focus list yesterday, but the character has now changed. Where as before we were waiting to see which way it broke, today it broke strong to the upside. In the alert this morning I mentioned I was waiting for a pullback to try and enter, but it never came. It can be frustrating not getting the entry level when you have “called” a stock, but I will rarely enter a trade without a good risk ratio. That’s a road headed for ruin. A few of you emailed me and were able to get in before my alert in the $208-212 range. That is fantastic. You are using the focus list as it is intended.
TOL has been off and on the focus list, and is now back on with a pattern similar to a bullish engulfing pattern (current candle envelopes previous candle in downtrend or pullback). Stochastics are oversold and RSI is strong. Entry in the $35.60-$36 range, stop at $34.90.
The rest of the focus list remains the same as yesterday. So for tomorrow it is IWM, TSLA, AAPL, LNKD, WOOF, YELP, GMCR, GS, TOL and EMES.
These are stocks that I always watch, though they might not be in my tradeable watchlist, nor are they actually always leading the market (TSLA in recent months).
TSLA and Z broke out today. We well watch both for good entries in the near future. NFLX and GS are consolidating near recent highs.
Sector and International ETFs
GLD is setting up for a nice short as price moves back up to converging breakdown gap fill and the moving averages resistance. Stochastics are also overbought.
I am still holding a half position in YELP, as it holds the breakout bar and 200 dma. I was stopped out of KORS and TWTR today. Alerts were sent. I entered focus list stock WOOF. An alert was sent.
Please note that I am delaying updating the spreadsheet to at least close or sometimes a day or two later. I do not want non-members to be able to use it for alerts. You will have the necessary info from alerts and the Trade Report.
Here is the Trade Journal with current open and past closed positions (today’s trades will not update until tomorrow).
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