During this sell off there will be opportunity in the making and you need to know which stocks are still very strong and will catch a bid even if the market stays flat. I will be doing this by looking for stocks above a 50 day average and giving good setups while staying above. There are also some bearish looking stocks that have remained weak and in consolidation during this entire move higher in the general market. Some of these setups will be in the stock charts at the end. I haven't even considered looking at shorting these names until the overall market was weakening as well. I will likely be going back to trying to keep an equal amount of shorts and longs just like I was during the last sell off and stick with which ones are working. That way if the market keeps selling off I will keep shorting good setups, if the market bounces back I will keep buying strong stocks while managing risk in the losers and riding profits in the winners.
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The first thing I see looking at the S&P is that we still have a rising 50 day and we are still above the key swing low (can see it better on this hourly chart) right below $184. The thing is even if we get a bounce from right here it would still be a near equal low when what we want to see for strength is a clear higher low. I will be watching where the next high takes place and if it is lower then I will get more cautious on the long side than I am now. The bond market reacted very well to the 50 day and I realized this week that they didn't ever take out that low. Because of that, even though we made two swings I am going to consider that $105.6 swing point one low for the daily chart. Now we are back at the breakout level and it is just a matter of if we break that $109.2ish level for a breakout. Since this is such a large base I want to see a retest of the breakout level before I get aggressive, but that may be a few weeks in the making anyway. Bids still going off in the gold market and it blew through the prior high. We are still in a position where the bears would have to make new lows way down below $115 to make a lower low as well so I think bulls are going to be very confident on any pullbacks. There is nothing else to do here but watch the hourly chart to make lower highs and lows then get under the 10 day average for a buy able pullback because I won't be buying up here.
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Nothing really standing out too much on the breadth indicators except the shorter term one is near the top of its range and may pull down some with the market. The only thing on my mind here is the VIX and I have explained why plenty of times.
This time instead of doing individual charts, I am just going to list out the symbols and if you want to see the chart I have linked them up so you can click on the ticker. I only did that this time since there are so many tickers I will be watching for favorable price action. I am not going to be taking a position in every ticker, these just have good price structure on the daily charts and this is where I will be looking for quality price action on the hourly charts. Some will fail and some won't it is just survival of the fittest right now. I'll be paying attention to swing highs and lows, the 10 day average, and the relationship between the 20 day average and the 50 day average on the hourly charts (a nice distance between the two at a 45 degree angle is ideal) for holding swing trades.
Long:
AGO, AMZN, CF, CVS, DAL, DIS, DTV, ETFC, EXPE, FB, FFIV, FSLR, GMCR, GPS, GT, INTC, JNPR, KORS, LMT, LUV, LVS, M, MGM, MYL, P, RAD, TYC, UBNT, VLO, VMW, WYNN, YELP, Z
Short:
CELG, CHK, CVX, DLTR, F, MMM, SU, TRV, TWTR, X, XOM
If good setups emerge in other tickers or if there are any changes or updates to these tickers, then you can see when I tweet that kind of stuff out on StockTwits or Twitter here: @M5amhan.
As a side note I think the Fed announcement this week will be pretty important for the intermediate term direction of the market. Although ultimately price dictates my actions, I think the market will put increasingly more weight on these Fed announcements as uncertainty starts to come back while they are supposed to be tapering on every meeting. Will be interesting to see what they do in the midst of all this noise coming from Russia.
Last thing I wrote two blog posts other than the recaps last week. One of them was on having a plan and the other was on the emerging markets & our dollar potentially crashing and how that would effect US markets. You can find that on the home page or at the bottom of this post. Thanks for reading
Trade well,
-Michael
