September 19, 2011
By Geoff Bysshe
The markets are not all working their way higher as nicely as you might believe if you're focused on last week's impressive 5 up days in a row statistic. Consider this set of facts:
1. The bulls have the Q's on their side, as it has now closed over the 50 and 200 day MA, but
2. The SPY's have lagged somewhat based on their standing relative to Sept. 1 highs
3. The DIA and IWM can't even muster up enough strength to exceed Aug highs!
Last week was impressive, but given the fact that all 4 market watch charts have negatively sloped 50-day MA's that are under their 200-day MA's, it should be expected that we'll see a pull back into last week's range. The Q's are bumping up against the 57 level which would be a very logical place for at least a short term-top based on the July swing low and the 200-day MA.
Friday was up, but it was more or less a consolidation day. This will make it easy for the markets to find themselves trading under their pivots. The pivot stack and OR location relative to the pivots should be a strong consideration in deciding which type of trade to focus on. In a bear market rally like the one we're experiencing, make sure you are very aware of any short OR reversal below the pivot or in a negatively stacked condition.
This week could be a good week to scan for bear flags and stocks trading on volume below the prior day low.
September 12, 2011
By Geoff Bysshe
Today the markets gapped lower then struggled to get back above the prior day’s floor trader pivot level. The markets closed on a strong note near their high of the day, but just a fraction above their one day pivots. You should be able to see commentary and charts covering today's market action in another post here today.
The lower open, strong close creates a pattern of the market potentially bouncing off key support. This is a good time to to use HotScans look for stocks trading on volume that have outperformed the market. Strong volatile stocks in a weak market can have potential for day trading or swing trading set ups.
Fist I scanned for stocks that closed on good volume over the prior day’s high and that yielded a lot of interesting patterns, but since the market has just experienced a pretty big swing from its highs two day’s ago to its opening low today, I decided to make the scan a little more strict.
The image below shows the results and the settings for scanning for stocks that closed over their 5-day high. This means they have cleared their intra-day highs of last Thursday which was the market’s recent swing high. I also required greater than average volume so I know they were trading on volume as they moved up today.
This is nice tight list of stocks with potential for day trading breakouts, or trading reversals on a day trading or swing trading basis. I don't expect the scan will result in stocks to buy right away. I'll find those that fit best for the day trading and swing trading systems we follow.
Note that I've focused on the long side in this post. I'm doing similar a scan for stocks on the short side using the 30 day lows as a frame of reference.