Quick Summary:
SPY bounce trade. LULU entry. TNA profit taking. Focus list stocks in play include YY, UA and BITA (short).
Video Analysis:
No video analysis today.
Key SPY Pivot Levels: Round number $200, Old high 201-202, 50 dam 197.01, 100dma 195.59 , gap 193 pivot lows 190-191
Under the Hood and Trading Game Plan:
Early morning $SPY dropped hard to into the 192 range and filled the August 13th gap we have been watching. As we've said, almost all gaps get filled and that one was no exception, even after charging ahead almost 10 points from the gap level. The market recovered and formed a long tail hammer-like candle.
I entered at the end of the day in expectation of at least a very short term bounce, as buyers came in at the end of the day. There is nothing yet that tells me the character of the market has changed or that $190 won't eventually be tested. This trade is just to play a bounce within a trend. If we get the bounce, we must reassess its strength to determine if it is a "dead cat" bounce within a trend down or a return to the bullish trend.
The game plan continues to be very selective with setups and look for optimal entries. There is nothing wrong with sitting out right now and waiting for the right time to pounce.
Current Trades
Profit was taken in $TNA off the hammer bounce.
Entered $SPY based on hammer candle. Stop placement is in the middle of the candle. Notice that the $TNA and $SPY trades do not have the same 2: reward to risk most of my trades have. These are higher probability trades with lower targets, so I don't necessarily need the same reward ratio.
Entered $LULU based off hammer candle. Stop is placed around $41. Target $44-45.
The Trade Results Journal/Spreadsheet is up to date.
The Focus List
BITA broke below the 50 dma on Tuesday and looks vulnerable due to price acton and distribution in volume. A move to $60 is possible. Short entry here with a stop around $76-77 and target at $60-65 offers good risk reward.
UA broke below the breakout late July breakout bar and recovered, printing a hammer. Entry at these levels, with a stop at $65 and tarot at $69-73 offers good reward to risk.
YY bounced off the 20 dma. Entry here with stop at 70-71 and target at 77-80.
Yesterday's focus list still worth watching:
bounce plays: $GMCR, $GOOGL, $YELP, $YINN
short setups: $NFLX, $BIDU, $LNKD, $BITA
strong setups: $MNST, $GRPO, $PANW, $TWTR, $AUXL and $PNRA
Market Leaders
The market leaders bounced or broke even. TSLA broke a downtrend off a high volume gap up. GOOGL is the most interesting setup printing a hammer at a key breakdown/support level.
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.
New subscribers and trial members please leave me any feedback/comments in the comments, via email (singhjd1@aol.com) or twitter (twitter.com/PaulJSingh).
