Tuesday Watch List

Same story as before – SMA100 was an impenetrable wall again today for the SPX and that makes me nervous. The previous pattern is still valid (rising wedge banging against SMA100). Both are bearish. The question is whether traders and, more importantly, institutions will ignore the bearish signals and step up to the plate and buy.

Volume was ridiculous and has been generally trending down since the beginning of the month. Money is heavily sitting on the sidelines just waiting for some directional catalyst. With this anemic volume comes increased volatility and the likely hood that moves up or down could be nasty – protect yourself.

One of two things seems likely.

We break to the upside and get out of this SMA100 wall and finally leave it in the rearview mirror. I won’t be convinced unless volume supports.
Second option would be yet another failure on SMA100 and a reversal back to the bottom of the rising wedge. If it happened tomorrow, that would put us around SMA200 (orange line). This is is the scary zone and could mark the beginning of a very heavy sell-off. If the wedge is broken to the south, I’ll likely keep it simply by playing TZA or shorting SPY. We’ll see.

In either scenario, I encourage you to be careful. Today was a great day in the Boom Factory thanks to some amazing trades by Kunal. Hopefully, you took some profits along the way and didn’t make yourself fully exposed headed into Tuesday. That’s the key in this market – reduce overnight exposure and ride out intraday moves.

Tuesday’s action, as you likely know, will be driven heavily by the Fed – their tone, optimism, the said-but-not-said language. Traders invest based on confidence and we’ll need the Fed to show some optimism to keep the market up tomorrow.

Solars in Focus Tuesday:

LDK and JASO are both reporting Tuesday. I’m looking for trades off of these as many of their peers have boomed lately. LDK is a little more overbought than JASO, so I’ll lean towards JASO in hopes of a strong move through recent highs in May.

Others in Focus:

JMBA – Nice move today on move through descending trendline resistance. However, volume was weak. We’ll need to watch this one for possible swing SMA50 and 200 just above…. Could prove challenging.

PIR – Got a little triangle going. Watching for possible scalp.

OCNF – I’m in this one today. Not a bad cup and handle with bounce off SMA50 today. Only thing lacking is volume. I’m in at 1.17. 1.40 is my stretch target, but might sell on the way up.

DCTH – I was shaken out of DCTH today, but I still have a radar on it and will participate if it sees volume.. Absolute stop on SMA200.

MNKD on swing radar as it approaches SMA200. I’m almost definitely long if it moves above.

APWR – watching for volume and move through 8.74 before I go long. Would like to swing from there with stop around 8.50.. Definitely not a hold under SMA50.