Quick Summary:
While SPY at highs and still short setup, lots of pullback setups for longs on focus list. GLD in support zone. Current trade is SPY short.
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The Market
Key Pivot Levels: 191.52: new high resistance 187.19: 50 day moving average 181.31: recent low 181-184: plenty of buying in this range.
Under the Hood:
SPY crept up a bit again. Nothing has changed technically. The big positive is the market has hit new highs. The negatives include extreme overbought stochastics, negative volume pattern, small up bars versus long down bars and a general apathy towards these new highs, as evidence by the small volume.
Trading Game Plan:
We are still stuck with the same plan. Short strength or wait for a breakdown of the old high to short. For longs, we look for individual equities to pullback. For those that are new or want a review, please look at reports from last week. This one shows what SPY has done over the past year when hitting extreme overbought levels.
If my current SPY short (via reverse ETF SDS) hits its stop, I will look to re-enter SPY short again.
I received a lot of questions on where to put the stop on SDS. I do not have a hard stop in place for SDS. It’s too hard for me to figure out where to place it in relation to SPY. I am watching SPY, and if $193.50-.60 gets hit, I will exit SDS. If you feel you can not watch SPY and need a hard stop, just short SPY and don’t use a mental stop. You will give up leverage but have the comfort of having a hard stop in place.
The Focus List
I was shocked when reviewing my watchlist this weekend. I have 19 candidates for the focus list from a watchlist of around 80 (beav, kors, bid, axp, su, dlr, mcd, tol, win, ati, cxo, bcrx, wynn, fb, wlb, ibb, gmcr, amzn, googl). Rather than post an annotated chart of each one, I am going to make comments on each chart.
BEAV: strength shows the $94 range is holding support. Expect a move to round number $100. Entry on pullback to $95.
KORS: Holding 50 dma. Entry on weakness at end of day to see if ma holds. This one is volatile and not for faint of heart.
BID: Bottoming pattern, entry between $38-39, stop under $38
WLB: Consolidating at top of breakout. Still needs pullback.
GMCR: Still working it’s way to gap fill. Looking to enter in $110-111 range.
AXP: just like WLB, consolidating at top of breakout range.
SU: pulled back to bottom of breakout. Still could fill gap at $37.50
GOOGL: consolidating gains. Like to see a pb to 50 dma.
DLR: nice pullback after run up. Good volume pattern. Entry at pb to 56-56.60.
MCD: let’s see if round number $100 holds. Entry on weakness in the $100-100 range.
AMZN: might be following footsteps of NFLX, GOOGL, FB . . .keep watching for pullback.
TOL: Nearing pullback entry at $35-35.50
IBB: entry on pb to 50 dma in the 531-535 range.
WIN: strong trend pullback. Entry on weakness.
ATI: Entry under 40.50. Stop under ma at 39.98.
FB: pb to 50 dma. Entry between $61-62.
CXO: ma pullback and bottom of trading range. Entry at $129-130.50.
WYNN: ma pullback. Entry $210.50-212
BCRX: breakout and moving average pullback. Entry $9.20-9.60.
As the week goes on, I will annotate charts from this list. If you have any questions, tweet, comment or email.
The Watchlist
Most stocks are either pulling back to good entries or are still extended. CCE and BTU are no longer watchlist stocks, but I have left them on the list. If the market turns and we start looking for short setups, these will be high on the list.
Click here and scroll over ticker to see thumbnail chart
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 (TSLA in recent months).
Most of these guys stalled today with small gains or losses after nice moves in previous days. GMCR, GOOGL, FB and AMZN are now on the focus list. We’ll continue to monitor CAT and TSLA as short setups.
Sector and International ETFs
Yeah, I know you don’t want to try and catch a falling knife. GLD has been in a bit of a free fall but has fallen into a support range and printed a “hammer” candle on Friday. It is also very oversold. I small stab here playing a quick bounce may be worth a try. This is not one to back the truck with, maybe just load up your little Prius and have a little fun.
Current Trades
Only holding SPY short.
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