Quick Summary:
SPY breaks below $200. Thoughts on overall game plan. Focus list TSLA, FEYE, ENDP, MNST, ZU, YY, ARUN. Market leaders mixed with pullback failure at highs or continuation of short setups.
Overall Game Plan:
Friday's note still applies: This is one of the strangest markets I have traded in the past 8 years. There is little excitement about being at new highs, which there normally is. Why is that? It is because few stocks are participating. At this moment IWM is a better indicator of how most stocks are doing right now.In the near future, I am going to change my approach a bit. First, I am not going to let my market analysis come into play with my individual stock trades. Due to the extended nature of the market, I have been quick to take profits. I will switch over to some of my shorter term setups. Finally, I am going to be very selective with trades. For those that want to trade more, I will post daily updates of setups that are available for those that want to take them.Key SPY Pivot Levels: Round number $200, Old high 199, 50 dam 197.54, 197.50 and $196.50 gap fill and support levels
Under the Hood and Trading Game Plan:
SPY broke down hard, easily breaking the $200 level we have been watching. Is this another fake out? It doesn't feel like it, considering now we have a breakdown of a breakout, not just a move from a range. Oversold stochastics are turning over from overbought levels and the negative divergences are still in place.
I will continue to manage the $SPY short (via $SPXU) and be selective with long positions. It's best to be cautious until we see some signs of buying.
Current Trades
I am holding $SPXU. I entered $FEYE, which has pulled back to the 50 dma and has a strong volume pattern. Stop is under the 50 dma and recent low at $32 and target is $36-37.
The Trade Results Journal/Spreadsheet is up to date.
The Focus List
I am not looking to enter many long positions at the moment. If SPY pulls back to the 50 dma, many momentum stocks will become very oversold and near support levels ready for a bounce. In the meantime I'll continue to watch the focus list.
Market Leaders
These are not necessarily stocks leading the market, but stocks I watch as an indicator for strength in the market and sectors, and use for as individual trades.
Market leaders were down across the board. $GOOGL pulled back hard from highs and round number $600. $TSLA hit short target at $250 and could be in free fall. Z is at a strong support level. If that breaks it good drop further. $NFLX is $22 points from strong support.
Please read the post 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 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 (twitter.com/PaulJSingh).
