01-25-15 Trade Plan

Even with the shortened trading week the bulls were able to take the NASDAQ positive on the year and take out the previous high.  This puts the market in a much better environment for stocks to move higher so long as we can stay positive.  It should be mentioned that no other indices were able to take out the previous high nor go positive on the year.  To me that isn't as important as the price action in the NASDAQ because tech and healthcare are the leaders in this bull market.  That's also why I tend to put focus on one index here each weekend because all I want to track is the leader and get the outperforming stocks on my watch list to trade.


Last week we talked about two scenarios happening and scenario A is the one that is playing out.  Here are some chart notes I made about what happened this week and where it leaves us now: link here.  The Russell has been playing around with $118 for quite a while now and with new break even acting as resistance and round number $120 being directly above it, the new level for me to signal health is higher lows above $120.  S&P is struggling at previous high/break even but if NASDAQ continues to show strength I'd imagine S&P will just play follow the leader.  That's why leading price action always is top priority.

The list this week is all long side potential.  There are some really great setups forming out there and I couldn't add them all so I just took what I thought were the best.  From here the watch list will filter itself as setups trigger or fail if bulls stay in control and some of the ones I skipped over may end up on the list during the week.  I'll tweet them out if that happens.

There are also just as many stuck in downtrends and continuing lower.  But the indices tell me where to put my focus and I won't take short positions in stocks in a rising tide environment.

For about the past month and a half it's been a big waiting game for me, not too active as the indices chop around.  Mostly ETFs and stocks I've been holding a while.  This week I'm seeing enough good for me to start to step back in, so with that I'll probably be more active on twitter and stocktwits with ideas and charts.  The other indices still have more work to do but as long as NASDAQ acts well and gives a good enough environment for strong stocks that's all I care about.  As always thank you all for reading

-Michael