Quick Summary:
Key levels for $SPY and $QQQ. New focus list stocks as market improves. Key sectors biotech, defense and financials.
Under the Hood and Trading Game Plan:
The market is extremely overbought, as it has been for the past few days. SPY has already taken out the 200 dma during this "V' move, and is now looking to overtake the 50 dma. If the 50 dma clears, there is a good chance the new high gets tested, probably after some consolidation. Therefore the 50dma is the key level we are watching going into Monday. If we get a close above the 50 dma, it will be a good long entry on the way to a new high test.
$QQQ has already cleared the 50 dma and is now right at a key price level at $99. I am currently short $QQQ by going long $SQQQ. If the $99 range clears I will have to exit the position. Though the 50 dma has been cleared, it is still a key area to watch. A failure here would likely lead to the two lower gaps getting filled.
The current game plan is to manage short positions, watch $SPY levels for long entry possibility, watch $QQQ for 50 dma failure and start keying in on strong individual equities acting strong and in strong sectors--currently Biotech/pharma, Aerospace and Financials.
Current Trades
I am currently holding $SQQQ and $DUG.
The Trade Journal
The Focus List
Last weeks focus list stocks in play but requiring pullback:
MEG,SPLK,BABA,BIDU,PANW,GMCR,MSNT, HOG
New additions from biotech/pharma, aerospace and financials.
GD is interesting in that it broke out to new highs, but has a strong negative RSI divergence. This also occurred at the July high and led to a deep pullback. A close under $130 setups up a breakout failure short.
Defense stock BAH has been in a strong trend and it looks like the 20 dma should act as support. Entry on a pullback to $24.75-25, stop around $24.25-.50.
GS has remounted the 20 and 50 dma and could test new highs. An entry on slight weakness with a stop just below the moving averages and tarot at $190 offers good risk to reward.
There are many biotechs showing up on my screens and I am still working on narrowing the list down. Here are the 13 I am currently monitoring:
EPZM,BLUE,AMAG,MYTH,CEMP,ANAC,UTHR,TECH,JAZZ,AUXL,MNKD,AKRX,NVAX
Tomorrow morning I will create a "Biotech chart show" and go over each of these.
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). dddd
