Quick Summary:
Market pulls back hard. We watch for clues. If trading, long setups UCO and DIG (oil/energy) NUGT (gold minors). Focus list off the table, still watching MNST and CYBR. QQQ and Retail possible shorts as negative candle patterns emerge.
Video
http://youtu.be/A4cpW_tu0oMNote: I highly recommend that you watch the video if you can, rather than just read the notes. I talk about strategies, entries and exits more in depth in the video. I try to make them short and to the point with little non-essential information.
Indexes and Game Plan
As we talked about this weekend, breadth and action in momos and IWM to end last week were cause for concern, and those concerns played out in a big way today. While SPY was only down .69%, momos and IWM were crushed. However, let's keep things in perspective. Today's move still keeps us near all-time highs and many stocks have had extended runs. A pullback here is good and will setup easy entries in the future. Also remember December often starts weak but ends with a band.
Game plan adjustment today:
For the most part, the focus list is off the table. We watch for clear signals to get long. In the meantime, we will monitor which stocks are holding up, which are breaking down, which remount, and new stocks that emerge.
If looking to trade, look to Oil/Energy and gold, which gave us minor confirmations today. QQQ and the retail sector gave us bearish candles at tops/resistance. This action is a short setup. If taking this setup, manage position size and risk closely, considering the history of dips being bought.
IWM's big move to 200 dma.
Notice QQQ trend break.
Today's Trades
I was stopped out of TSLA for a small loss and exited BITA for a profit. I am still holding Z. The stop for Z is in the $109-110 range.
Sector Watch
We talked about oil/energy putting in bounce confirmations. Today's signals were not "all clear" signals, but they were decent signals. USO put in a bullish engulfing pattern (today's candle completely envelopes Friday's at a bottom or support). DIG put in a minor hammer candle (close near high with a tail formed)
If looking to trade crude oil, you can use UCO for added volatility (2X).
DIG
Retail formed a "bearish engulfing candle. This is a short setup and we expect a pullback.
Note: if looking to short, will likely have to short RETL or another retail ETF. Could not find inverse ETF to use. RETS does not seem to exist anymore.
Emerging markets were hit hard and off the table for now.
RETL,USO,XLE,EDC,IBB,INDL,BRZU,NUGT
During times like this, I look for sectors acting strong. Today we had healthcare services and Business Equipment, along with parts of software. I will continue to monitor these sectors.
Breakouts
None of the breakouts we are watching broke technically. We continue to watch.
With earnings season coming to an end, we continue to watch the attractive earnings breakouts we collected. The good ones are forming ranges and some will become the next momentum players.
TTWO, CALD, COUP ACHC,RFMD,ACCO,AMED,X,TQNT,AN,TRNX,MSG,RCPT,VDSI,BCOR,CATM,BWLD
Focus List
The focus list is, for the most part, off the table for now. We watch for focus list stocks that are holding and those breakdown from key levels. Breakdowns will be watched for remounts.
Two focus list stocks that are still considered is CYBR (sector held up today and right at 20dma) and MNST (holding up well)
focus list retail: NILE,TIF,SIG,OUTR,HABT,GES,MUSA,ARO,ULTA
focus list: BITA,TSLA,Z,MNST,SOHU,COUP,SPLK,CYBR,POT,PTX,LMT,MEG,BIDU,GWPH,BABA,VEEV,WUBA (see video for entry specifics and key stocks to start the week)
Please read the Education Archive and posts 23 Laws of the Part Time Swing Trading the Market Speculator Way and How to Analyze Your Swing Trade Results It is important to know these setups and rules if you trade off the Report.
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