Quick Summary:
SPY continues off Friday's negative candle pattern and now sits at key 50 dma level. Took profits in X today, entered earnings breakouts BWLD and TWTR. Holding SPXU. Possible biotech short tomorrow and longs in commodity pullbacks.
Video
http://youtu.be/kDE0b2yxGC4I 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
We talked about Friday's negative candle pattern at the key pivot level, and today SPY continued down slightly as expected. It now sits at the 50 dma, which is another key level. If the 50 dma breaks, we are back rangebound between the 50dma and 200 dma and I would expect the same volatility as before. Until this range resolves, we continue to use the 2015 adaptation of taking quicker profits and gaming a higher winrate than normal. Once we get a decent trade we will go back to looking for bigger gains and lower winrate.
**Those who do not adapt there strategies get killed in these types of choppy markets. We adapted going into the year, thus are off to a good start. If we stuck with our usual style we would have been chopped out of a number of trades. Don't let anybody fool you, there is no such thing as a fool proof system. What you need is a toolbox of setups and systems, and adjust them according to market conditions.
The game plan is to monitor SPY for continuation or rangebound action. We continue to watch earnings breakouts, strong focus list stocks and key sectors oil/energy/gold miners/metals and select retail. We will also look to short biotech on a bounce as the market leading sector looks like it could rollover.
We are in the midst of earnings season and will start to build an earnings breakout watch list, as we did last season.
Trades
I exited X taking profits at $24.45 (entry $23.05) for a 6% gain.
I entered earnings breakout stocks TWTR (half size position) and BWLD on pullback. Stops are below breakout bars, in the low $146 range for BWLD and 45-46 range for TWTR.
Still long SPXU (shorts SPY).
(see video for more details)
2015 Trade Results: http://bit.ly/161Yl4w
Focus List
I will look to short the biotech sector, IBB, by going long BIS if the sector bounces tomorrow morning. We are also watching the range in semiconductor sector SMH and will consider going long on pullback in the $52 area. (see video).
Many of the setups we are watching for tomorrow are earnings breakouts. Non-earnings breakouts come from energy, steel and retail.
WBAI,LULU,HSIC,GOOGLE,LNKD,RMD,LOCO,GTLS,TX,OAS (see video)
Q1 2015 Earnings Breakouts:
TWTR,LNKD,CBM,MTSI,XLS,GLUU,DATA,ORLY,LE,CYN,INFN,RMDBWLD,APP,QSII,X,AN,BSET (see video)Notice the rounding pattern in RMD. It is very similar to TWTR breakout pattern last year.
Sector Watch
IBB is weakening. We will monitor for more of a weak bounce for a short entry, unless character changes (more volume comes in on bounces). Inverse ETF BIS.
Former leader semiconductor is now range bound and we will look to play that range.
We are looking for bottom formation commodity sectors Oil/Energy/Industrial Metals/Chem to pullback a bit.
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
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.New subscribers and trial members please leave me any feedback/comments in the comments, via email (singhjd1@aol.com) or twitter
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