05-11-14 Trade Plan

Well it was another week of nothing (for my style of trading).. unless you traded earnings reports which isn't something I am doing at this point.  Twitter lockup was released and the "common knowledge" for months was that the insiders were going to let loose and beat the stock down to new lows and it was a lay up trade.  We all know how common knowledge is supposed to work in the markets but this time it worked and for obvious reasons in hindsight.  Speculative stocks are being shut down (fear is high in stocks like these), twitter is in a downtrend, earnings got a bad reaction a few days prior which led up to a perfect storm at lock up expiration.  FEYE GRPN WFM TWTR are all stocks that got hammered this week and they have all been in downtrends for a good amount of time.  A downtrend is a place that sellers are winning.  The moral of this story is to ignore everything, including common knowledge and the people bashing the common knowledge because neither of them know what is going to happen and study price and trends.  Even ignore me if what I am saying cannot be verified through price.  All you can do is manage risk and that should have been done a long time ago in twitter.


As I said at the beginning not much happening in the overall markets yet.  NASDAQ still showing a breakout area above 88 and break down below 84, and I have no idea which one is going to take place or when but I hope we get resolution soon.  The S&P is a lot closer to making a break out which would be new highs, or a close above 189, as I said last week.  There is a lot of support below on the S&P too.. 1) last weeks pivot low, 2) 184-185 which is YTD break even and a huge support area, then 3) 181 support area we bounced off of earlier in the year so that would be a lot of work for sellers to get through.  Path of least resistance is higher for sure in the S&P.  Bonds continue to uptrend and above a rising 50 day average is healthy.

I wont go through each sector this time because nothing has really changed since last week's post but I will say that I am finding myself in the healthcare and discretionary sections of my stock list and there are some pretty good looking stocks in there for moves to the upside.  As long as the sectors aren't breaking down I think the individual names I'm watching can make some nice moves.

This internal I follow still isn't showing signs of life but it's not heading lower either.  It's doing nothing so not much use coming out of it yet.

So if things start picking up again I'll tweet them out but if it's just suckering people in and chopping around as it has been doing then I'll continue to stay quiet and do something else.  I know when I shouldn't be trading and if I am not trading as per my usual activity then I'm not going to be tweeting my usual level of activity either.  But like I already said if my activity does pick up, there is a good chance the stocks will be coming out of healthcare and discretionary.

Trade well,
-Michael