07-13-14 Trade Plan

The indices are still moving in an uptrend and have not been invalidated.  Although the Russell had a bit of a falling out this week, the other three main indices are still holding their supporting trends very well (whether looking at 130m or 65m does not matter as of now).  When the Russell started to see selling pressure, you saw that trigger some momentum names to the downside, similar to what we were seeing in early April but without NASDAQ stocks.  NASDAQ and it's stocks held up very well and are actually the strongest part of the market still.  My entire watch list for this week is basically NASDAQ stocks (MA, IBM, AAPL), no small cap momentum like names (P, YELP, CRM, etc.)

Let's look at the 130m trends this week rather than daily charts since that is where we are in the markets.  SPY and QQQ are having no problem holding the trend but the IWM broke it.  It didn't just randomly or suddenly break it though, the 15m trend turned lower on July 3rd and could never recover.  It is still in a 15m down trend.  Diverging indices have been happening all year though (especially a weaker Russell) so I will just ignore that as long as the other three are somewhat in alignment.

Sectors in focus are just the three associated with NASDAQ stocks which are technology (XLK), healthcare (XLV), and discretionary (XLY).  They are all holding their 130m trend and I will be looking for shorter term trends to come off of that to act on.  Let me be clear though, after 8 weeks of non stop straight up action I would like to see some healthy consolidation/pull back for another week or two.  But I am not going to fight the market for what I'd like to see.  I am just going to acknowledge that this has been going on for a while now and understand where I am in this trend (which is 9 weeks in).

Trade well,
-Michael