Quick Summary:
Possible SPY and IWM short on strength. Watch earnings breakouts for pullbacks. Shorts setting up. Focus list longs GMCR, YY, Z, BWLD, INO, GWPH. Watching broken market leaders AMZN and CAT.
The Market
Key SPY Pivot Levels: 198.20 : recent old high, 197. 23 dma, 194.25: 50 dma
Under the Hood and Trading Game Plan:
Friday’s gap down again was on higher volume than the preceding up days. This has become a concerning trend typical of a topping trend. The gap down also can be considered a failed new high breakout, though there never was a really strong breakout to begin with. Along with the negative RSI divengence, these bearish factors lead me to believe we will get a pullback to the 50 dma.
On the positive side is the round number $200 magnet, the fact that we hit new highs and a strong start to the earnings season.
My bias is now slightly bearish and I will consider shorting SPY on strength. I will likely use inverse leveraged ETF SPXU. Wit inverse ETFs, you enter long in order to short the underlying equity. If you are short SPY, you can do it by going long SPXU.
IWM gapped down below the 50 dma that it had remounted earlier this week. The volume pattern, coupled with price action, is bearish. I will look to short strength via inverse leveraged ETF SRTY.
I am still looking for long setups in momo stocks and earnings related setups that have pulled back are ready to bounce, and developing short setups. My focus for shorts early in the week will be market inverse leverage ETFs SPXU and SRTY. https://bullsonwallstreet.com/analyze-swing-trading-results-make-money-choppy-markets/
Current Trades
I am still holding GMCR and TSLA.
The Trade Journal
The Focus List
Not including the earnings breakout list, I have shortened the focus list to start the week with recognizable momo stocks and one earnings pullback. All pullback entries are negated if market or stock tanks on high volume.
BWLD earnings are Tuesday. I would not enter until post earnings. I like it on a low volume pullback to or just under the 20 dma, or on breakout of $167.50. I won’t comment on stop until entry level is knows post earnings.
GMCR trend consolidation pullback. Entry around here. Stop under 50 dma in $117-119 range, target $125-130.
GWPH trend pullback. Entry in the $82-83.50 range, Target $95. Stop $80.
INO breakout pullback. Entry in $11.50-12 range. Target $14. Stop 11.
YY brekaout out after pullback. Entry on weakness. Stop at $74. Initial target $85.
Z entry on pullback to old high are consolidation range below old high in teh $135-140 range. Target $158. Stop $132.
Short Setups GRMN, FSLR, MSM , SDRL and DAL are all near entry levels.
During earnings season I keep an eye on breakouts. These are not necessarily focus list stocks that are near entry levels now, but I keep a breakout list and over the days and weeks ahead, I watch for good pullback or post break consolidation entries.
From yesterday’s breakout list, it looks like HA is off the table after yesterday’s down candle. INO and RES could be setting up as bo-pb entries soon.
Add these to the 8 we area already watching from last week. EGHT, INO and RES are nearing entry levels. INO is officially on the focus list.
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.
Z continued off yesterday’s huge move. AMZN broke down hard post earnings. I ‘ll be watching two post earnings breakdowns in the market leaders, CAT and AMZN closely this week to see how they react.
Please read the post 23 Laws of the Part Time Swing Trading the Market Speculator Way and How to Anayze Your Swing Trade Results It is important to know these rules if you trade off the Report.
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