The market continues to uptrend very strongly and stocks continue to be in a good environment. Obviously this kind of straight up action in the indices cannot go on forever but it can go on for longer than most think it can and pretty much already has. If the indices start to loose the momentum they have had the swing points will signal that when the time comes. For now they remain in an uptrend and there is no evidence to the contrary.
The SPY and QQQ are both holding 30m trends still with the NASDAQ being the strongest index leading the market. The S&P lost its 30m trend and put in a lower low on Monday with the gap down, however after the first lower low it is time to look for a lower high. Bears couldn't make that happen and price moved back into it's 30m trend to close out the week. NASDAQ just held a consolidation above Monday's swing low, which is the key swing point for me right now. Breaking that low would simultaneously put in a lower high and low, which is something I also tweeted out so it makes Monday's swing point just that much more important. The Russell has no solid intraday trend right now, but the daily chart is in a position for one to start if price can get above and hold above $118.
I cleaned up the watchlist this week and added some new setups namely in the financial and healthcare sectors. I want to say something about what a setup is to me for those who don't know. A setup as most see it isn't something I really believe in, a specific price pattern or some kind of special candlestick that one focuses on solely. That leaves things too limited/isolated and lowers the probability of being in trends. To me a setup is something more big picture, when the stock is in a place where the institutions want to dump money into it (like being supported relentlessly above break even on the year, or above a rising 50 day with positive YTD performance). Using the daily chart for this part. That is subjective I know, it comes in 100 different shapes and sizes and it takes practice. This is also why I stay in a list of well known liquid stocks because I know the big money is paying attention. Then I actually want to see them dump money into it and that's where I trade it, that's what intraday trends are to me. It's the market dumping money into a stock enough to where it is consistently moving higher and during these intraday trends there are tons of entries along the swing points. So the point is there is no such thing as a setup to me really, only favorable stocks providing favorable moments to enter them. That is also the point of this watch list every week to point out the favorable stocks so during the week I (and you if you like) can be on the lookout for the favorable moments to enter. Hope that helps some of the new readers. Any questions are welcome in the comments, thanks for reading.
-Michael
