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There is a line on my charts that mark the new year and you can just look at the price action after that line, independent of the rest of the chart, and see what I mean by a change in market conditions. The S&P bulls do have an argument I suppose since we haven't even breached the 20 EMA on the weekly chart and that has been the line in the sand for over a year. However, the internals have been deteriorating for a very long time and haven't stopped. In my opinion that tells me that it is only a matter of time before we get a real correction, and that time gets more and more narrow as those internals continue to deteriorate. There is a load of support at $1760 area as far as priced based support that I'll be watching as well as the weekly 20 EMA for next week. I think the internals make the case much more for a continuation of this correction than the actual price does. Looking at the bonds and gold, they pretty much look the same. Both bottomed out right at the start of the year and have continued upward since. Bonds have already broke the weekly 20 EMA and gold hasn't, so I'll be watching that in gold next week. There is some price based resistance on the bonds right above around 133'25 area and gold at $1270 so I will be watching at how they react to those levels next week. Support levels will just be the normal moving averages I use.
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Ok, damn!! I'm seeing this updated internal for the first time just like you are but I knew it would be nasty. S&P percent of stocks above 200 SMA just smashed through the key 75% level I have been talking about for so long. To compliment that the VIX is up 30% today. This is why I said the internals are much more convincing for a continuation of this correction rather than just a down 30 handle day on the S&P. The percent above 200 is the internal that has been deteriorating for a while now and I have only seen one person talk about it. This is important people.. Just let those two internals sink in for a minute and remember, this is a good thing. Better prices for position traders, higher volatility for option traders, and a potential return to normal market conditions. These are massive moves on the internals though, huge.
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AAPL - Had plenty of time to rally last week and didn't, now looking heavy. Using hourly for entry, watch for earnings.
MSFT - Worked well last week through earnings. I like another long if it can hold above daily 20 EMA.
TWTR - I like this short from here
CRM - Was a great trade, now looking for another long on a successful test of daily 20 EMA.
MU - If this can hold above 20 EMA and give good hourly setup, will take a long
EA - Rising 200 SMA is holding up price well and weekly looks bullish. Need hourly setup to enter long
FSLR - Rising 200 SMA being tested now, need to see bullish reaction to start looking for longs
BBY - I think there is more downside here. Need hourly setup.
GME - I think there is more downside here. Need hourly setup.
So, not many setups to write about this weekend but that is fine. I am not willing to short into rising support and that is what a lot of potential movers are doing right now, I'd rather buy on a bullish reaction off of that rising support or short on a breakdown through the rising support at which point would start to roll over and would no longer be rising support. I will be watching these stocks until I see more and I will tweet them out at that point. If you want to catch updates on these and new setups then follow me on StockTwits or Twitter at @M5amhan
Trade well,
-Michael
