Quick Summary:
SPY tests 200 dma, forming a positive hammer formation. Took profits in SPXU and DIG trades, entered IPHI. Narrow focus list as we wait for market to make its move. Sectors gold miner, oil and energy in play. Looking for pullback entry.
Video
http://youtu.be/0QCSPw9XrUcI highly recommend that you watch the video, rather than just read the notes. I talk about strategies, entries and exits more in depth in the video, yet short enough that they are only 5-10 minutes long.
Indexes and Game Plan
SPY opened on a gap down and test of the 200 dma, followed by an intra-day reversal that after some volatility, held into the close. The hammer candle formation that emerged sets SPY up for a short term bounce. Keep an eye on the overhead 20 and 50 dma.
I expect volatile action until the trend out of this current range plays out.
The game plan is to watch the 200 and 50 dma for establishing our trend bias. Until then we will key in a limited focus list, earnings breakouts and the sectors we have been watcing (gold miners, energy, retail, biotech).
We are in the midst of earnings season and will start to build an earnings breakout watchlist, as we did last season.
Trades
Took profits in SPY short vehicle, SPXU for a nice gain.
Near the close exited DIG a nice gain.
Near the close entered IPHI off the hammer formation near the bottom of the breakout bar and moving average. Stop is under today's range with a target around $21. Note that I may take profits a bit earlier depending on market conditions.
Results: http://bit.ly/161Yl4w
Focus List
Focus list (see video for setup and entries):
QSII,IPHI,UCO,NUGT,DIG,LOCO,CEMP,GOOGL,RMD,X,AAPL,INFN,EDC (see video)Q1 Earnings Breakouts:No new additions today.BSET, QSII, CYN, INFN, RMD, NFLX, SBUX, ABMD, TUP, X (see video)
Sector Watch
Gold miners, energy and oil all were strong today. Energy and crude oil closed with a remount of the 20 dma, while NUGT bounced off the 20 dma. We will watch for good pullback entries (See video).
Sectors of note: Energy, Emerging markets/Brazil/India, Biotech, Retail and Gold Miners all strong, with homebuilders leading.
We have talked about stalking industrial metals like copper and steel for future bottoming plays in a previous video. Yesterday steel leader X broke out from the downtrend on earnings. This could be our first signal in these sectors. Keep an eye out.
Last Quarter Breakouts
This is the earnings breakout list from 2014 4th quarter. We continue to monitor.
TTWO, CALD, COUP ACHC,RFMD,ACCO,AMED,X,TQNT,AN,TRNX,MSG,RCPT,VDSI,BCOR,CATM,BWLD
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