Quick Summary:
SPY analysis continues to target recent lows. Selective with setups. Today's trades $DAL and $BITA profit taking, holding $TLSA and $SPXU. $LULU and $PANW at front of watch list.
Video Analysis (3 minutes):
Today's intra-day video went over the $BITA exit, $TSLA, $SPY and focus list stocks.
Key SPY Pivot Levels: Round number $200, Old high 201-202, 50 dam 197.01, 197.50, pivot low 190, gap $193
Under the Hood and Trading Game Plan:
Price action showed little significance today, as $SPY spent most of the day battling to stay above the recent low. What is significant is the daily back and forth (volatility) continues to expand and volume picks up during this pullback. This is not the sign of a healthy market. What you want to see is big price action to the upside with lower expansion on pullbacks on lower volume. SPY's August up move was on low volume and small price bars. The probability of a test of the lows at $190 or the gap at $193 is higher than 50 percent.
The game plan continues to be very selective with setups and manage the $SPXU position. There are no need to make trades in this market unless you have a great setup.
Current Trades
I am still holding $SPXU (to short SPY) and $TSLA (short).
I took profits in $BITA today. I received questions about why I did not stay past my target or take partial profits. There are two reasons: 1) market conditions 2) the looming 20 day moving average as resistance.
Like clockwork, the stop pulled back right at the 20 dma and gave up some gains. Note that in a strong uptrendind market/stock, I would not worry too much about the 20 dma.
I entered $DAL at the end of the day as it tested the 200 dma, failed to breakdown, and printed a hammer by the end of the day. I am not looking for a big move here, just a play of a bounce tomorrow.
The Trade Results Journal/Spreadsheet is up to date.
The Focus List
I continue to be very selective with entries in this market. In fact, the hammer setup I traded today is the type of setup I take out of the toolbox when there isn't much else I want to do. It is higher probability, but with less reward to risk ratio. I prefer lower probability with higher reward to risk.
To view the watch list for the week click here. I continue to watch stock mentioned in this week's Reports and Videos.
LULU is one of the better setups I am considering right now. Entry here in the $41.50-42.50 range, with target at $44-45 and stop at $41.
PANW post breakout range has been undeterred by the pullback in the market. I like it as close to the bottom of the range as possible, with target at $102 and stop at $93-94.
Short Setups:
TSLA, NFLX. See Monday report and videos.
Market Leaders
Market leaders were a mixed bag today, which is expected when SPY closes at basically break even. GOOGL, FB, NFLX, TSLA look healthy and ripe for entries on pullback.
NFLX and GMCR tried to put in moves to the upside today, but ended up printing long inverse tails/hammers. Not much else of signficance.
Please read the post 23 Laws of the Part Time Swing Trading the Market Speculator Way and How to Anayze Your Swing Trade Results It is important to know these rules if you trade off the Report.
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