Archive for February, 2012

Swing Trading Week in Review – February 17, 2012

Sunday, February 19th, 2012

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DIA - Swing Trading

Creeping Higher!

The market rallied to new highs again this week but it was a little slow in the making.

Monday traders watched as the market GAPPED UP and a decent GAP DOWN last Friday.

Tuesday we watched as the market sold off all day only to put in a rip to the close the last 30 minutes of the day.

Wednesdays price action put a lot of fear into the market and had most traders talking about a sell off.

The market spoke loud and clear on Thursday though as it ripped right out of the gate and closed near the high and above the high of Wednesdays trading.

This is why we always form our own opinions by listing to what the market is telling us. We never try to outguess the market.

Did Wednesdays price action and volume tell us anything?

Of course it did.

But we executed our trading plan accordingly and let out LONG trades play out despite all the talk of the "sell off" that was now upon us.

We did NOT change our plan and exit our positions based on what we thought "might" happen.

We were rewarded nicely for being so disciplined.

If you "hit the bid" on Wednesday you might find yourself now chasing stocks up or waiting for the next move to happen.

Stocks and obviously very bullish right now but there will be a retrace in the market sooner or later.

As we look forward trading on Tuesday there are plenty of stocks setting up for potential trades.

A few on our Watch List?

$WFC - Swing Trading Blog

$M $CBRL $WFC $DOW $RIG $HAR to name a few.

Until next week…Good Trading to You!

Intraday Swing Trading Stocks and ETF’s

Tuesday, February 14th, 2012

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Today I thought I would take some time to show you some examples of our Intraday Swing Trading strategies.

Lets first take a look at the Diamonds ($DIA) to see how the market started out this morning.

DIA - Intraday Swing Trading

In the chart above you can see how the market GAPPED DOWN opening well below yesterdays close.

You can then see the two bars after the open are "inside bars" and this gives us a nice pattern to trade once we get a breakout.

We always wait 15 minutes (3 bars) to allow the market to establish itself before we look to enter into a trade so this was a good setup for us.

As volume starts to pick up Bar #4 creates a BREAKOUT to NEW HIGHS.

Both price action (3 bar break) and increasing volume are exactly what we need.

We looked around and there were plenty of stocks with a similar pattern to trade.

Along with $DIA $CREE stood out as a LONG trade to us with a nice pattern and defined risk.

$CREE - Intraday Swing Trading

Again the price action was good and volume was increasing.

The overall market (and $CREE) continued higher but then stalled out bit.

As an Intraday Swing Trader you have to nimble and and react quickly when the market shows signs of changing gears.

This type stalling action we see after a GAP DOWN is a flashing caution sign for us.

At this pivotal point of change you also need to scan the market to locate potential trading opportunities.

When the market "stalled" we began looking for stocks that were weaker than the overall market (relative weakness) and found $PCAR and $PPO.

$PCAR - Intraday Swing Trading $PPO - Intraday Swing Trading

Both stocks GAPPED DOWN with the overall market but never rallied to new highs when the market did.

Both stocks also created a very nice "lower higher" setups after an orderly retrace from their initial low of the day.

As the market begin to fall apart the selling volume started to accelerate in $PPO and $PCAR triggering trades in both stocks.

Our LONG trades were not looking good but we actually got out of $CREE with a profit.

Once the market broke to down to NEW LOWS we were now in SHORT mode.

Both $PPO and $PCAR pushed lower as well before showing signs of a retrace.

$PCAR $PPO

A few bars later and after a retrace off of the lows the $DIA was setting up for a move lower.

$DIA

$CREE eventually sold off with the market pushing down to a new low for the day.

$CREE was also now setting up nicely for a good SHORT trade.

The "lower high" was established and we were now able to draw our DOWN TREND lines to create a nice channel for context.

This is classic PVT trading!

$CREE - Intraday Swing Trading

$CREE followed through nicely to the down side and created a "lower low" as the sellers stepped in.

$CREE - Intraday Swing Trading

$CREE pushed through the bottom of the channel expanding it a bit before showing signs of a retrace.

The price and volume action on the last bar in the chart below shows tell tale signs of the move coming to an end.

$CREE - Intraday Swing Trading

Since we only trade the first two and last tow hours of the day we were now "flat" as the market began to retrace just after 11am.

Here is a summary for our morning.

We went from LONG to SHORT in a few stocks and identified stocks that were weaker than the market.

Once the market "stalled" and began showing signs of breaking down we took trades in these "weaker" stocks.

The market followed through to the down side and these weak stocks sold off nicely.

After making new lows the market setup for another move lower which allowed us to enter into several new trades that worked out as well.

Hopefully this walk through gives you some insight into how we swing trade intraday.

Swing Trading BLOG – Week in Review February 10, 2012

Sunday, February 12th, 2012

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$DIA - Swing Trading ETF

The Rally continues but…

The market drifted higher this week extending the rally that started at the beginning of the year.

So where does the "but" come in?

Well Fridays price action left swing traders wondering if the market has reached its peak (at least for now).

Friday traders watched as the market GAPPED DOWN and sold off in the morning only to rally and close at its high.

The sector action was interesting as well. We watched as some of the strongest sectors either "stalled" or began to pullback even as the overall market pushed higher.

The ultra strong Homebuilders ETF ($XHB) traded sideways all week.

$XHB - Homebuilders ETF

The Retail ETF ($RTH) did the same.

$RTH - Retail ETF

The Airlines ($FAA), Real Estate ($IYR) and Materials ETF's all started to retrace this week.

$FAA - Airlines ETF

One sector to watch that outperformed the market this week was the Solar ETF ($TAN).

$TAN - Solar ETF

As far as individual names go there were some great moves and the charts still look great.

$NE, $HAR, $AKAM, $V, $VECO, and $WFM turned in a great week!

$WFM - Swing Trading Stocks

As we look at the swing trading charts we see a lot of stocks that are still looking very bullish.

Some of the best swing trading indicators are flashing signs of being "overbought" though.

The overall market does continue to show signs of being a bit extended and Fridays trading action leaves us wondering what next week will bring.

So what do swing traders do in a time like this?

Stay true to your plan.

You see  we always have a plan…and so should you!

We know exactly what we will do if the market turns down to make a run back towards the 50 day SMA.

We also know what we will do if the market jumps out of the gate on Monday and rallies to new highs.

We have our plan in place well before the market opens each and every day.

Do you know exactly what you will when the market opens on Monday?

Have a plan in place BEFORE the market does whatever it is going to do.

Once it does simply take action based on the plan you have already laid out.

Not only is trading a lot less stressful when you do this it also helps take the emotion out of your trading decisions.

Until next week…Good Trading to YOU!

Swing Trading Week in Review – February 3, 2012

Saturday, February 4th, 2012

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$DIA - Swing Trading

Rally to NEW HIGHS!

A great week for both Swing Traders and Day Traders as the market rallied to NEW HIGHS this week.

After a GAP DOWN and rally on Monday the indices put in a solid up move and finished the week off with a nice GAP UP Friday.

As expected the strongest sector ETF's turned in a great week.

Real Estate ($IYR), Financials ($IYF), Homebuilders ($XHB), Retail ($RTH) and the Technology sectors ($SMH $XLK) all moved up nicely.

$XHB - Home Builders ETF

The Semiconductor stocks (which we mentioned last week) were in play this week with $CREE, $VECO, $ATMI, $MRVL, $NVLS and $LRCX making some nice moves.

$CREE

$NVDA also has a good looking chart as it held its 50 day SMA and made a move higher on Thursday.

The Steel stocks we mentioned were a bit mixed with $X and $NUE moving higher while $AKS turned in a poor week.

The Casino stocks $LVS $MGM continued their super strong up moves.

$MGM - Swing Trading

There were plenty (way to many to list) of great looking chart patterns to trade this week!

Actually there we so many trade set ups that there is no possible way for us to trade them all. It seemed that everything was rallying this week!

This is the kind of week that rewards you in a big way when you take action and trade exactly what the market is telling you.

This type of rally and follow through is what traders dream about and look forward to each and every day.

This brings us to our next very important observation.

The market is back in the spotlight!

The talking heads on TV will surely hype this market up and eyes will turn back on to the market in a big way.

Everyone will start looking and talking about what the stock market is doing and how great everything is.

Although it is great that the market is doing well…Don't get caught up in the hype!

As a trader you need to stay focused!

I have seen traders change nearly their entire methodology when the market goes to one extreme or the other like it has this week.

I have seen scalpers suddenly become "trend" traders. I have seen short term swing traders ignore exit signals and essentially turn themselves into position traders.

DO NOT LET THIS HAPPEN TO YOU!

Changing your strategy may work for a short time but unless you have a proven system for trading a different way then this type of change can backfire in a BIG WAY!

Stick to your trading plan just like you have been doing day in and day out.

"Let it Ride" is a term that gamblers use…not traders!

Keep your focus and as always have a plan for whatever happens next in the market.

I hope this week was good to you!

Until next week…Good Trading to YOU!

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