Archive for September, 2010

Swing Trading Week in Review – September 24, 2010

Sunday, September 26th, 2010

Swing Trading BLOG – Swing Trading BOOT CAMP

Well we FINALLY got the directional move in the market that everyone has been waiting waiting for.

The BREAKOUT we saw on Monday was quickly followed by a 3 day shallow pullback which had some traders thinking the market was up to it's same old tricks.

SPY

With the way some of the individual sector's were acting we were actually thinking the same thing.

After holding up nicely for so long the Real Estate sector ETF (IYR) broke out with the overall market on Monday.

For the 3 days following the BREAKOUT sellers aggressively came in and drove this ETF well below the level of last week's consolidation.

Here is the chart…

IYR

You can see how this BREAKOUT failed and stopped us out (and a lot of other traders I would assume) as it retraces all the way back to it's 50 period SMA.

A swallow pullback in lines with the overall market was expected from such a strong ETF so this type of price action was not only frustrating but concerning as well.

The Energy sector ETF (XLE) had similar price action after giving us a LONG signal on Monday.

XLE

The retrace that followed created an "equal bottom" and came very close to our initial STOP LOSS level.

Friday XLE continued it's move up as the overall market BROKE OUT again.

The Retail sector ETF (RTH) continues to be the rock star!

RTH

Even after being short term OVERBOUGHT we saw RTH break to the UPSIDE Monday.

RTH then created a nice swallow, almost sideways consolidation during the 3 days that the overall market pulled back.

Friday the strength in this sector continued as RTH gapped up and traded through the $94-$96 level we mentioned last week.

One sector in transition this week were the Semiconductor's.

SMH

The SMH has been a real laggard but this week we saw buyers step in a finally bring this ETF back above it's 50 day SMA.

Although CREE and SNDK did result in new SHORT trades for us early in the week overall this sector seems to have found some new strength.

KLAC and NVDA stand out so we will watch some of the other stocks in this sector as we move into trading next week.

Friday was one of those days that there were so many trades that were triggering that it was hard to keep up!

We saw a ton of stocks BREAKING OUT and some stocks that just continue to RIP to the upside without even taking a breather.

Amazon (AMZN) opened this month at $126 and has gone straight up since then!

No retrace, no pullback just a parabolic RIP up to (so far) $160!!!

AMZN

Apple (AAPL) has basically done the same thing by going from the $240's straight up to close above $292 on Friday!

AAPL

Some of the BREAKOUT stocks our list included AGU, MMR, CCJ, INFA, HAL, SMG, WYN, NTAP, QCOM, CMI, EQIX and our recent money machine SOHU.

Not our entire list but a good list of stocks to watch as we move forward the next few weeks.

There were also a TON (way too many to list here) of non-breakout LONG trade setups last week.

This is a good sign of overall strength in the market and much better than just one or two sectors leading the way.

All in all the market is looking stronger and stronger but as always FOLLOW THROUGH will be the key.

Although there are a few stocks on our list that look weak it is hard to make a case for getting SHORT in light of the recent strength the market has shown us.

That being said we will continue to do what we do each day and prepare accordingly for each and every outcome that the market can present us.

Doing so allows us to react accordingly (and hopefully profitably) when the market decides what to do next.

Until next week…Good Trading to YOU!

Swing Trading Week in Review – September 17, 2010

Friday, September 17th, 2010

Swing Trading BLOG – Swing Trading Boot Camp

The UPWARD drift continues!

In last week's BLOG POST we mentioned the lack of volume we are seeing and the need for volume to increase to move this market decisively higher.

Well the market did move up this week but as the first line of this post states it was more of a drift than a significant move.

The move this week puts us right back up to the June 21st price levels that we saw just prior to the sell off that took us to NEW LOW'S for the year.

DIA - DJIA ETF

The best chart that illustrates the larger sideways trading channel we are in has to be the chart of the S&P 500 Index.

Here is the chart for the SPY to show how this weeks trading action brings us right to very top of this channel.

SPY - SP500 ETF

The Nasdaq has actually been a bit stronger.

This most recent UP move brings to QQQQ'S above that all important level set on June 21st but after a 12 day up move it seems way overbought in the short term.

QQQQ

As far as sectors go it is pretty much the same story as last week.

The Agriculture ETF's (DBA and MOO) remain strong with several stocks in this sector pushing higher this week.

DBA actually pushed to a NEW HIGH for the year this week while MOO trades a bit below its yearly high.

DBA - Agriculture ETF

In last week's post we mentioned a few stocks to watch in this sector coming into this week.

One of the few trades we made this week was in John Deere & Company (DE) which is one of the biggest holdings in MOO.

DE

After showing so much recent relative strength DE put in a nice tight sideways consolidation pattern last week.

As the market GAPPED UP on Monday DE was up right along with it.

Our original entry target was just above the high set in early August which was $69.47.

When the market rolled over mid morning DE stayed strong as we entered into a position at $69.55.

Our initial STOP LOSS level is set at $67.10 which is just below the recent consolidation area.

This puts our initial risk at $2.45/share.

Our PROFIT TARGET is set at $74.45 which is twice our initial risk per share ($2.45 x 2= $4.90 + $69.55).

After 3 more days of consolidation DE made a HIGH VOLUME UP MOVE today and finally pushed our position nicely to the UPSIDE.

The trade is still open so we will manage our position accordingly and let you know how it turns out.

As far as the other sector's in the market go we cautioned you last week about the LOW VOLUME moves in XLE and RTH.

XLE actually put in a retrace this week despite the strength in the overall market.

XLE - Energy ETF

RTH on the other hand GAPPED UP nicely with the market on Monday and then followed WITH VOLUME on Tuesday.

A nice move UP since breaking the DOWN TREND channel line.

RTH

With the extreme upward angle of this last move and possible overhead resistance in the $94-$96 area RTH is short term overbought just like the overall market.

 

Take caution going into next week but continue to watch this sector moving forward once the market has pulled back a bit.

The Real Estate ETF (IYR) is holding up nicely but consolidated this entire week.

Breakout or pullback?

Keep this one on your radar as well in the coming days.

IYR

The notable laggard (so far) is still the Semiconductor sector ETF (SMH).

The week's upward drift still leaves this weak ETF trading below its 50 day SMA while almost every other sector is trading back above theirs.

SMH

CREE, CRUS, SNDK (although it stopped us out last week) and a few other names in this sector still have very weak charts.

This could all change in the near future especially if the overall market continues to strengthen.

The big picture tells us that the overall action in the market remains sideways.

The recent strength does look favorable for a continued UP move in the market after we digest some of these recent gains.

BUT…

We have seen this a few times before on both the LONG and SHORT side of the market.

Don't get to comfortable with this market just yet by only staying focused on one way trades.

Be prepared for anything (have LONG and SHORT ideas) that way whatever the market decides to do from here you can take the appropriate action.

Until next week…Good Trading to YOU!

 

 

Swing Trading Week in Review – September 10, 2010

Sunday, September 12th, 2010

Swing Trading Blog Post-

This week the overall market continued to show  it's recent strength as it closed a bit higher than last week.

Low volume often leads to low volatility and that is exactly what we saw this week.

DIA - Swing Trading ETF

Some of the individual sector ETF's also inched higher but without any real conviction.

The Agriculture ETF's (DBA and MOO) remain strong as stocks  like ADM and AGU moved higher this week.

With so many price levels that could be overhead resistance areas coupled with the low volume up move it make us wonder how long this move will continue.

Absent more volume coming in to move this market decisively higher it seems some form of a retrace is in order.

The Real Estate ETF (IYR) is holding up nicely after breaking out to new highs last week.

The 2 ETF's we mentioned last week (XLE and RTH) that broke their short term DOWN channel lines pushed a bit higher but on lower volume…a "caution" sign for sure.

XLE - Swing Trading ETF RHT - Swing Trading ETF

We will continue to watch these sector ETF's going into next week and several stocks from these sectors are on our Watch List as well.

On the flip side of the coin the Semiconductor stocks took a hit on Friday and pushed the sector ETF (SMH) lower despite the overall strength in the market.

Several individual stocks in this sector had chart patterns that setup some nice risk/reward ratio's if you elected to trade on the SHORT side.

CREE and CRUS turned out to be nice STS trades as they all pushed down towards their recent lows and SNDK started its next move DOWN on Friday.

CREE

All in all we find ourselves (yet again) at a pivotal area in the overall market.

There are several stocks (DE, AKAM, MOS, EQIX) that look great for LONG trades in the near future *IF* buyers step up in force to move push them through their overhead resistance levels.

We could make the same argument for the weak stocks which look like they are setting up to move lower very soon.

It is still a choppy market and trend traders are pulling their hair out for sure!

If your strategy has a longer term holding period it may be prudent to sit on the sidelines until this market makes up its mind.

Another option is to shorten your time frame (like our STS Strategies) which means tighter stops and smaller profit targets.

Trade smart and protect your capital and until next week….Good Trading to YOU!

 

 

Swing Trading Week in Review – September 3, 2010

Sunday, September 5th, 2010

Swing Trading Blog Post-

What a difference a week makes.

In last week's BLOG post we told that their were buyers at the 10,000 level in the DJIA.

We saw the buyers step in and hold the market up last week and again on Monday and Tuesday of this week.

Wednesday is when the real fun started.

After a big GAP UP Wednesday morning we saw the market rally the rest of the day to finish just off the high of the day.

Thursday brought more of the same and then the GAP UP, sell off and intraday reversal during Friday's session is a clear sign that buyers were in control.

DIA - Swing Trading DIA

The market continues it's erratic behavior and if you have trading for any amount of time you know that the month of September is likely to bring more of the same.

Last week we posted about the strength in the Agriculture related ETF's…DBA and MOO.

We gave you the "head's up" to watch this sector as it seemed ready for it's next move to the UP side.

Both ETF's followed through nicely this week as the market pushed higher to end the week.

DBA - Swing Trading ETF MOO - ETF Swing Trading

Several of the other "strong" ETF's rallied to new multi month highs this week.

The Real Estate (IYR) and Utilities (XLU) are on this list as well as a few International ETF's like THD and BZF.

IYR - Swing Trading ETF

We also saw the Energy (XLE) and Retail (RTH) ETF's break their short term down trend lines.

XLE - Swing Trading ETF RTH - Swing Trading ETF

The weak sector's we identified last week…the Semiconductor's and FInancial's…put in a decent bounce off of their recent low's.

We wondered last week if these sector ETF's were going to "bounce" back to their 50 Day SMA's or if they were ready to push to NEW LOW'S.

We got our answer although the "bounce" in the semiconductor's was really less than impressive.

The last 3 trading sessions have taken the market and several stocks to near short term "over bought" levels.

We are not going to chase the market at this point and will simply wait for the next opportunity to initiate some trades.

We will let our current  trades play out and manage our positions accordingly.

September is notorious for being a slow, choppy month for trading so be patient and wait for your ideal setups to get into the market.

Until next week...Good Trading to YOU!

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