Open Trade Update
Existing Position: SMH Long 35.02 (Sent Email Alert to take off another 20-25% Position at 37.62 or better. Now ½ to 2/3 Position left)
Current Price: 37.66
Stop: 35.29
Target: 40.00
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Existing Position: XLF Long 18.38
Current Price: 18.85
Stop: 18.38 (At 2 ATRs our swing trading rules take you to a no loss stop-shown on this week’s video)
Target: 19.49 (Similar to SMH, you have a choice to take 20-25% off at 3 ATR or 18.98)
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Existing Position SGG Long 62.90
Current Price: 62.94
Stop: 61.38 (Back to original stop)
First Target: 65.90
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Market Analysis for Trading on 5/6/13
The Dow and NASDAQ began Friday’s session with a breakaway gap (a jump and hold over recent price activity). Question on everyone’s minds after the volatility swings last week is whether this was a Runaway or Exhaustion gap? Runaway and the fun is just beginning. Exhaustion gaps tend to happen at the end of a prolonged trend. But, with all the ups and downs and sideways action, not sure how “prolonged” I would interpret the trend to be. Therefore, I am guessing more “Runaway” with some other layers to watch. One, the Russell 2000 which cleared the March 15th high intraday, but did not close above it. Secondly, how well/poorly the bonds act next week, especially after a no-change policy on rates by the FED, but a possible “bubble” back in the works.
Just had to share a couple of quotes From Subscribers:
“Mish, I just wanted to let you know how terrific your stock picks and education has been over the last several weeks. I have been busy at my practice so can't pay too much attention to the markets during the day. However, I keep tweetdeck on and I am loading selections from your daily picks into the robots with pretty astonishing results. Over the past several days have 7 long positions on and all have reached 1.5 atrs!” Dr. Len Z.
“Sorry to keep repeating myself, but I just have to say it again... thank you. Every day I learn from you. You are simply an amazing teacher. I am slowing getting to know myself and the kind of set ups I like as well as the risk I want to take….. I hope that every other trader out there finds you as a mentor, you are simply the best. “T. Ho
S&P 500 (SPY) A doji day after the strong open. We went into Friday thinking 162 and the high was 161.88. Provided 159.780 area holds, watch for more upside Subscribers: Pivots positive in all indexes
Russell 2000 (IWM) 94.96 was the March 15th high and today, it made a new high of 95.47 but closes under the old high for 2013. So, unlike the others, no runaway gap which could or could not be significant. Watch Friday’s low as super important to hold
Dow (DIA) Breakaway classic gap. Typically, you do not want to see this gap filled for quite some time.
NASDAQ 100 (QQQ) Comments going into last Friday: “Now, am ending the week making the bold statement that this index is just getting going”. Ha. Subscribers: Not seeing this overbought so unless there is a gap down, still very bullish here
ETFs:
GLD Would not have expected this to run with the market, but it did hold up rather well. Subscribers: Which is why we are still watching the mining stocks for possible bottoming formation.
XLF (Financials) Another breakaway gap. Subscribers: 3 ATRs is 18.98 form our entry
IBB (Biotechnology) Nearly 100% overbought on the weekly Relative Strength Indicator now. But, the rest was indeed short-lived. However, this is one where an exhaustion gap seems more plausible.
SMH (Semiconductors) Hello! But we have started now to take some profits, holding core.
XRT (Retail) New highs again not only possible-done and done.
IYT (Transportation) If 110 holds has room to recent highs and higher
IYR (Real Estate) Wrote coming into Friday, “for end of week, not expecting this to be the leader.” True, but see this more as some fatigue rather than a top
USO (US Oil Fund) Gap over the 200 DMA making that now support
OIH (Oil Services) Far from the 2013 high but did break the lower highs trend and still very friendly here Subscribers: 43.82 the 80 monthly moving average
XLE (Energy) 80.14 the 2013 high
TBT (Ultrashort Lehman 20+ Year Treasuries) Exactly what I tweeted about all week-the key reversal after the flush day last Wednesday; will be watching for a dip to buy. Subscribers: Opening Range Reversal good to watch for
XOP (Oil and Gas Exploration) Looks better away from the 200 DMA but Unconfirmed change phase to bullish Subscribers: Been liking this all year, now will see about a low risk entry if confirms the bull phase
XHB (Homebuilders) A gap up but not breakaway. Subscribers: Not my first choice now as place to look for new long entries
UNG (United States Natural Gas Fund) Subscribers: Classic technical analysis. This chart shows a golden cross on April 15th, big move already happened. Then, big drop down on Thursday; then on Friday touched and held the 50 DMA. Trading with the trend, will look for a long entry against the 50 DMA. Negative pivots so has to cross R1 and Friday’s high.
SGG (Sugar ETF) Subscribers: Inside day. Would consider an add if clears last week’s high.
FXI (China) Subscribers: Took off some at 1.5 ATRs. Playing out the balance
RSX (Russia) Subscribers: Now at the 50 DMA and overhead resistance
Bye for Now!
