Markets last week were in a place of indecision and this weeks price action confirmed it even more. The big level in the NASDAQ has been $100 for a while now and this week we saw buyers step in at that level creating an even more defined neutral standpoint for the indices. There are clear levels above for trend resumption ($105/$106) and below for a break down ($100). Until either of those levels are taken out I believe we are in a neutral market condition. To me that means there is no overwhelming tide in either direction, even with the volatility we have seen. My focus right now is on non-correlated ETFs like TLT, GLD, FXI and the strongest names on my watch list. Possibly some short side trading as well if it presents itself.
Just looking at the NASDAQ chart you can see how important that $100 level is, from both a psychological and technical standpoint (which I would argue is the same to an extent). The corresponding level in the Russell is the $114/$115 area where we saw last weeks swing low and the false breakdown from 12-16. For trend resumption in the Russell holding above $118 to form higher highs and lows would be what I want to see. Seems like I'm a broken record on that statement but it still holds true.
The watch list reflects the state of the market right now. Some of the stronger names I'm watching closely: LNKD, FEYE, TASR, CMG, and PFE. Pfizer is actually one I'm looking at for a longer term trade using the daily trend. FEYE needs to get above $35 with an intraday trend, TASR just needs to keep doing what it's doing holding 130m swing points, LNKD needs to go positive for the year with an intraday trend, and CMG just needs to hold the breakout and continue.
The short list is there to see how well bears can handle their own setups. AMZN & TSLA both have been weak for a while and have big weekly warning signs behind them. BABA is using a 130m downtrend and GS is just there for observation being up against monthly resistance and a huge name in financials. Any short side trading will be in those names unless I post anything else on stocktwits.
So basically I'm all over the place right now but not going crazy with exposure. If you aren't comfortable with something like this the best bet is just more patience in my opinion. Risk management is always first priority. Thanks for reading
-Michael
