If there was ever a time when the market players, news outlets, etc. were as clueless as my dog concerning the direction of the market, it is right now. It’s somewhat of a joke. I just watched a vid where some dude said the market “looks like it’s on its way to a double bottom, but I see some SMA support that could send it back up.” How is that a helpful statement? It’s all about planning, not predicting. Know what you’re going to do when something happen. You don’t have to prepare for every scenario – just prepare for one or two.. If it doesn’t play out, then sitting on cash for a day sure doesn’t hurt.
Quick thought – I still believe the market is not a safe place to spend much time swinging. For now, I’m primarily geared towards scalping. The charts are still messy and there are few attractive long setups. We’ll play what we’re given, but I’m treading lightly.
- The obvious – we’re oversold and traders are almost begging for a short squeeze reversal here (could happen based on Friday’s action).
- Looking for trading range between 1040 and 1020. If we see support above 1020, I’ll look to position long – this could be the bounce range that many are starting to look for.
- If the market falls below 1020, I’m going to look for short scalps on a move towards next support levels around Fibonacci support on 1002 +-. This will be a key range that could easily continue below mental support of 1000. If that’s the case, I’m shorting and reducing swings (short scalps only).
Let’s look at some long setups (with SPX holding above 1020):
- ARMH still on swing radar if it moves out of bull flag on daily (above 12.85)
- FFIV still holding upward channel, but barely. This stock will need market support to keep it going, but has good upside potential for swing traders looking to stay out of penny and microcap stocks. Gotta set stops under trendline if you’re not too familiar with the company, however,
- JMBA is still in play on falling wedge pattern, but I’m not long unless we get above 2.15 range.
- CPE – symmetrical triangle with strong trendline support. Technically, this isn’t a great triangle, but does follow the trendline well – that’s your key. Play long above, but wouldn’t hold below. Look for volume to help carry this out of the top of the triangle or we may see a failed breakout.
- NR – daily chart shows a nice trend up, but I’m struggling with an entry here. I do like the volume accumulation, but will need to watch. Thursday was a great entry point – missed it.
- CRUS looks interesting for possible swing long above 15.75 with stop just under 15 range. I like the volume interest over the last few months.
- JOEZ – still toying with SMA200. Careful. We need to see some confirmation support above with volume.
- DLTR continues to look strong. Currently testing top of channel on good volume. There are two trades here – swing trade long out of rising wedge, or short if it fails and heads back down. Confirmation fail would be under bottom trendline.