Quick Summary:
SPY fails to clear 50 dma. GS short entry on momentum divergence. $BITA nice gains on short. Focus list stocks nearing entry levels.
Video Analysis:
For the most the video going over focus list stock to start the week still applies. It is worth watching if you have not yet.
Key SPY Pivot Levels: Round number $200, Old high 201-202, 50 dma 197.01, 100dma 195.12 , gap 193 pivot lows 190-191
Under the Hood and Trading Game Plan:
SPY's weak gap open near the 50 dma was easily predicted to fail due to lack of breakouts and momentum. While closing off the lows of the day, price action is firmly entrenched between the 200 and 100 dma. We are still waiting to see how it plays out for clues on how to trade the coming week.
Last night I talked about two strategies to take that still apply:
1) Sit it out and wait for confirmation. A clean break of the 50 dma setups up long entry.
2) Take an anticipatory short position looking for failure at the 50 dma.
The easiest setup would be a break of the 50 dma followed by failure. This would be the easy confirmed short setup.
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
Let me start by saying that, while I have two short positions, I do not have a big short bias (though you could say I am leaning that way). I just like these two individual setups.
$BITA followed though nicely today, down $3.40 from short entry level.
I was stopped out of $LULU for a small loss, as my stop was tight and position size was half the usual size.
Today I entered $GS near the close. I talked about this RSI momentum divergence setup with $TWTR last night, but as the day developed the setup looked better with Report marker leader GS. If you are having trouble with this setup, review the annotations on this chart. My stop is above today's bar around $189-190 with a target near gapfil at $183. This gives me either 3:1 or 2:1 depending on where I ultimately place my stop.
The Trade Results Journal/Spreadsheet
The Focus List
A number of focus list stocks pulled back and are close to entry levels.
Strong Setups: ZU,GPRO,MNST,MBLY,TWTR,PANW,SPLK,MEG,ZLTQ (All setups discussed in video)
See last night's Report and/or watch video for specifics on focus list setups. Points of interest:
$MEG pulled back just below the 20 dma and looks to be setting up for a pullback entry.
$ZLTQ is pulling back to the moving average for nice entry.
$PANW looks good on a pullback to the gap fill range around $98-99
$NFLX closed above the 20 dma and could be changing in character. This could be a good long entry.
$MBLY pulled back hard to the 20 dma, but it was on low volume. Will watch to see how it holds.
$TSLA, like NFLX, re-mounted the 20 dma and could be resuming uptrend.
Market Leaders
Aside from GS testing highs, no significant developments from these guys.
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).
