Welcome to the new members who joined us late last week!
For both new and existing members, we are transitioning the Focus List back from it being provided by Mish’s Market Minute. You will now see it both as an email and posted in the Mastery Program Area of the site in the Focus List section. We’ll try to get the email out the evening before the market opens.
It is always recommended that you put the list in a HotScans Portfolio so you can more easily follow them. There are numerous training videos in the Mastery program that show you how to quickly filter for specific conditions like reversals, breakouts and gaps.
Market Comments.
If you have not already read the weekly commentary in our Market Outlook you should look at it before the open on Mondy. It will give you a broader perspective on why we think there is potential for the rally of the last 2 days to continue, but the longer term trend is still very negative.
From the day trading perspective the 4 market watch charts (SPY, QQQ, DIA, and IWM) fell so quickly that they left the potential for a similar move up if they clears key resistance levels. For all four I’d consider the key resistance levels to be last week’s high (Friday’s high) and the 10 day MA.
The Q’s are one to watch closely because they have rallied back up to the major inflection area of the swing lows put in during the June decline. This would be the best place for the bears to take a stand and push the markets back down. On the other hand, the fact that they are right back into the big trading range which defines the year thus far makes them the strongest relative performer so a break higher is worth following too.
We had a good trading week last week by focusing on only a few instruments and often the index ETF’s. This week may be more of the same. Remember, in volatile markets risk management and good execution is critical so a narrow focus and fewer shares is usually a good idea.
Long Focus:
The overall market condition should be stable to up in order to get too interested in the longs. With any of these long stocks there an OR reversal is preferable for managing risk, and remember we want it to be over S1 if the pivots are positively stacked and over the Floor Trader Pivot if the pivots are not positively stack. In either case, be very careful with anything trading below Friday’s low.
GLD
SLV
TLT
SLW
AAP
CAVM
CERN
CBS
NFLX
IBM
JAZZ
GMCR
MA
AAPL
BIDU
CMG
CF
COG
DECk
HANS
WPI
Short Focus
The market could very easily resume its decline and we’ll be watching these reverse ETF’s to take advantage of any significant decline.
SKF
FAZ
TZA
TWM
LQD