Archive for June, 2012

Swing Trading Week in Review – June 22, 2012

Sunday, June 24th, 2012

Swing Trading BLOG – Swing Trading BOOT CAMP

DIA - Swing Trading Strategies Blog

The markets continued to drift upwards (on low volume) to start out the week bringing the DJIA just above its 50 day SMA.

Wednesday was a different story as the news the market was waiting for finally came out.

The sellers showed up in a big way in the afternoon and followed up on Thursday with a day full of selling pressure.

Friday we watched as the market traded sideways creating a low volume "inside day".

Last week we told you that "One side will win the "tug of war" and you will miss the moves if you aren't ready."

Once the news came out you had to expect a dramatic move one way or the another.

Being prepared for anything (as we say over and over and over) is a key to becoming a successful trader.

If you had a SHORT list prepared then I am sure your triggers were hit either late Wednesday or sometime on Thursday.

With plenty of weak stocks out there I am sure you had plenty of options.

The Energy, Oil, and Oil Services sectors have been extremely weak so that was a natural choice.

$SLB $HES and $HAL had great chart patterns to trade…

SLB - SHORT Swing Trading Strategies

Some of the Retail stocks ($M $BBBY $RL ) also got smacked around despite the strength the overall sector is showing.

M - Short Swing Trading Strategies

Despite all the doom and gloom talk there are actually (for now) still stocks showing a tremendous amount of strength.

The sectors vary but take a look at the charts for $VZ $CRUS $LLY $ASH $V $MMR and $WFM.

So what is trader to do from here?

Go LONG the strong stocks? Or go SHORT the weak stocks?

As always it depends on your personal strategy but when the overall market is hoovering near its 50 day SMA we tend to play both sides of the market.

For our STS trades we will SHORT the weakest of the weak and BUY the strongest of the strong and leave everything else alone.

We are looking for SHORT TERM moves here…we are NOT position traders.

Often times one side will STOP US OUT when the market does make a definitive move but that is a good thing for us.

We then have more conviction and can look for more trades that are now going in the direction of the market.

Don't be afraid to make trades and to get stooped out….it's a big part of trading and it happens often.

Next week the market should give us additional clues to it's "true" direction so, as always, be prepared for anything (heard that before?).

Listen to the market and act accordingly.

Make your entries, set and honor your stops, take your profits. Rinse and repeat.

Until next week…Good Trading to YOU!

Swing Trading Week in Review – June 15,2012

Sunday, June 17th, 2012

Swing Trading BLOG – Swing Trading BOOT CAMP

DIA - Swing Trading BLOG

A nice week for the major indicies this week.

That being said was probably better to be a day trader this week instead of an overnight swing trader.

The intraday moves were very nice and offered reliable chart patterns to trade while the over night moves were less predictable.

See how we trade our Intraday Swing Trading Strategy here.

After a BIG GAP UP on Monday morning the sellers stepped in to bring the market down to end the day.

Tuesday didn't draw much excitement but starting on Wednesday the market started to show signs of moving higher.

Fridays close brought the DJIA right up to its 50 day SMA while the S&P and Nasdaq aren't far behind.

A few of the sector ETF's showed signs of life as well while others are showing extreme relative weakness.

The Gold ETF's continue to trade above their 50 day SMA's and although Silver hasn't quite caught up just yet it looks to be showing signs of strength.

GDX - Swing Trading Blog

As next weeks trading begins things could change in a hurry.

With all the news coming out next week be prepared for the markets to move very quickly. One side will win the "tug of war" and you will miss the moves if you aren't ready.

Look for stocks bucking the down trend (i.e. $WFM $EQIX) to add to your LONG watch list.

WFM - Stwing Trading Blog

Look for those stocks that did not hold up well this week to add to your SHORT watch list.

Have a plan in place so whatever the market decides to do from here you will be prepared to act (and hopefully profit).

Until next week…Good Trading to YOU!

Day Trading Strategies – Intraday Swing Trading Strategy

Thursday, June 14th, 2012

Swing Trading Boot Camp – Day Trading the Intraday Swing Trading Strategy

We thought we would take this opportunity to walk you through one of our day trades from this morning.

Our Intraday Swing Trading Strategy is very similar to our overnight swing trading method.

We use relative strength to locate and trade strong stocks (or ETF's) when the overall market is strong.

This morning was a good example of locating a sector ETF ($XLE) that was showing signs of relative strength AND also had a great chart pattern to trade.

Here is the first chart for $XLE

XLE - Day Trading Strategies - Intraday Swing Trading

Notice how on the chart above $XLE broke out to new highs in the early morning and rallied up until a little after 10am.

After a brief pullback $XLE was setting up again for a nice LONG trade. A move to the upside on increased volume was the confirmation we needed (BLUE ARROWS).

Our trend line was drawn in and we let the trade progress.

XLE - Day Trading Strategies - Intraday Swing Trading

On the chart above you can see how $XLE rallied to new highs again putting in 2 channel expansions before the "stall" (equal bar high) marked in orange.

This entire move happened on decreasing volume so we were on high alert looking for the signs of this move reaching its potential.

The"stall" was followed 2 bars later by a new high but this bar quickly reversed course and put in a bullish engulfing candlestick.

This bar combined with the failure to reach the top of the channel is a good sign that the move has come to an end and a good time for us to exit our trade.

The next bar followed through to the downside but we noticed that volume was drying up.

XLE - Day Trading Strategies - Intraday Swing Trading

The bar after the bearish engulfing bar reversed and closed near its high. Two bars later a new breakout was underway.

We didn't want to enter into a new LONG trade at this point since the move in $XLE was already extended a bit.

Below you can see how the new breakout stalled and basically traded sideways for the next 6 bars before finally breaking down and out of the upward trending channel.

XLE - Day Trading Strategies - Intraday Swing Trading

Even if the new breakout would have continued we aren't really concerned about it.

We are NOT trying to catch  every single bit of every move.

For our STS trades we typically set our target at a 2:1 risk/reward ratio and are very happy taking our profits at this level just as we did here.

As day traders our intraday swing trading strategy helps us locate (and hopefully profit from) price "swings" in the market just like you see here.

We hope this sheds some light on the strategies and tactics we use to trade the market day in and day out.

Until next time…Good Trading to YOU!

Swing Trading Week in Review – June 8, 2012

Sunday, June 10th, 2012

Swing Trading Blog – Swing Trading Boot Camp

$DIA - Swing Trading ETF

Swing Traders watched as the market puts in it's best week of the year this week.

After nothing but doom and gloom and talks of the next wave of the recession looming the market took off like a rocket this week.

But not everything is peaches and cream in stock market land just yet.

For one thing the volume on the recent UP move has been lackluster at best.

You can't really argue that it's summer time since the SELLING VOLUME we saw just 2 weeks ago spoke loud and clear.

Secondly all three indicies and almost every sector ETF are still trading below their 50 day SMA's.

The markets haven't traded under their 50 day SMA's for this long since the third quarter of last year.

And finally we still have plenty of overhead resistance to break through before I would start looking for the bull to return for any length of time.

Lets be honest…it still a bearish short term market (for now).

So what is your swing trading strategy in a market like this?

Our strategy remains the same. We SHORT (or use inverse ETF's) we the market is weak and go LONG when the market is strong.

At times of transition in the market we start to see less follow and tend to get stopped out a bit more.

As SHORT TERM TRADERS these are the clues that keep us on the right side of the market.

If the market does start to turn to the upside we will notice and hopefully be able to profit from it.

Have a trading plan in place so whatever the market decides to do from here you will be ready.

Until next week…Good Trading to You!

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