02-15-15 Trade Plan

Markets had a great week finally after a long wait from people like me.  As I was saying last week the bulls needed to hold that previous supply area then get back above break even for the year to be in a good position for a new leg up.  That's exactly what we saw so clearly on Tuesday when it gapped above break even, tested it multiple times intraday, then went on to make a higher high and trigger many stocks.

Let's take a step back for a second though.  Have a look at this NASDAQ weekly chart.  The consolidation we just went through was one of the best resting periods we have had throughout this entire bull market (starting from 2013).  Since we took out the highs, it is now a higher low in the uptrend.  Now have a look at this view of the same weekly chart.  We are 10% away from all time highs in the NASDAQ, every other index made this milestone a long time ago.  I don't think the leading index is going to give up 10% shy of all time highs.  One more chart I want to share right here - Russell 2000 weekly.  This is just an absolutely beautiful accumulation pattern, I couldn't say this before since bulls weren't breaking out of it or holding a trend above $120 but now that they are starting to you have to take the whole context into account.  To finish this paragraph I'll say that not a soul knows what kind of year 2015 will be, but we can take a look at the longer term charts and see evidence of where we are.  For right now all I'm seeing is accumulation on the weekly charts and I wanted to share that with you all.


Getting back to what we normally look at, starting with the Russell.  The Russell has been really liking the 65m trend for about the past year or so and right now that is what's behind this rally.  Key support to watch for next week if necessary is the area from $120 to YTD break even.  Holding that area would be a higher low as well as staying YTD positive within the 65m trend.  NASDAQ is much stronger right now holding a 30m trend.  Watch the swing lows to hold as usual and I guess the relevant support would be the $106 area we are breaking out from.  What's more important to me is that the indices hold up enough for stocks to continue to form high probability setups and trigger them.

The watch list really didn't change so much from last week other than deleting the short portion.  I added TRIP and WYNN to the long list to maybe play some reversal action if the opportunity presents.  I'll talk about WYNN in the watchlist analysis post.  Other than that it was really a great week for me only using these names and taking the trades as they come with the index wind at my back.

FEYE had an awesome earnings inspired breakout, my favorite kind.  I took no earnings risk but it left enough room for an entry Thursday morning and it's now being traded like any other intraday trend.  Without making this too long lets just get right into the next post.  Thank you all for reading

02-15-15 Watchlist Analysis - Link Here

-Michael