Quick Summary:
SPY, QQQ, XLE all form inverted long tails failing at moving averages. Holding $SQQQ and $DUG still based on intra-day reversal which came. Review of focus list stocks.
Note: Next Wednesday Kunal and I are holding a "breakfast with the bulls" an hour before market open. If you can make it, sign up here.
Video Analysis:
I am travelling so today's Report is in video format (9 minutes).
I discuss the market and handling today's gap up along with our strategy to hold on for that daily reversal, and how to manage our positions tomorrow. We also go over focus list stocks.
Video Notes:
$SPY forms bearish "inverted hammer" at moving average resistance after showing strength most of the day. Generally this is a good short signal, but this market has faked us out before.
Our position shorting $QQQ formed a "bearish dark cloud" candle pattern yesterday, but did not follow through today. Th gap open moved past my initial stop level, but we adapted our strategy knowing that the market has reversed at some point everyday over the past two weeks. Usually this is around 11am PT, so we had to hold on and wait til the close, where it finally did reverse and formed a long tail--failing at moving average resistance. Again, this is another bearish signal, but this market has a mind of it's own.
The fact that we took a small position size due to the current market volatility is an example of adjusting to the market and trade management. Because we took the smaller size and lowered risk, we can play with our stop a bit.
$DUG gave up most of our gains from yesterday intra-day, but recovered and we are still up 50-60 cents.
$IBB, biotechnology, broke out to new highs and is the hot sector right now. Watch for pullback for long entry. If highs fail, then it could setup a "failed breakout" short setup. That is not expected, but something to watch whenever you see a breakout.
Bullish Focus list stocks: $PANW, $MNST, $MEG, $SPLK, $BABA, $GMCR
Bearish Focus list stocks: $GS, $GPRO, $YELP
Earnings Breakout Watch: $HOG
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.
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