Archive for the ‘Stock Market Update’ Category

Swing Trading BLOG – Week in Review – July 1, 2011

Monday, July 4th, 2011

Swing Trading BLOG – Swing Trading BOOT CAMP

$DIA - Swing Trading ETF

WOW!

What a bounce we saw in the market this week!

After putting in a short term "double bottom" pattern last week traders watched as the market RIPPED up for 5 consecutive days this week!

After talking and emailing several traders this weekend it seems that a lot of people were caught off guard.

I sat with one trader after the market close on Friday and he sat there trying to convince me that the market SHOULD not have bounced so hard.

He also told me about how his positions (mostly shorts) SHOULD have acted during a bounce.

After finally revealing that he was still SHORT (after most of his positions were now very much against him) it is apparent that he himself SHOULD have done a few things.

The most important thing to get out of this little story is have a sound set of trading rules in place and stick to them no matter what.

What you or I (or anyone else) think the market SHOULD do DOESN'T MATTER and that way of thinking has absolutely has no place in trading.

As traders we look for opportunities to profit from what we think the market MAY do.

We also know that once we enter into a trade it MAY NOT do what we had hoped for.

We as traders expect to be wrong often.

They key to success is understanding this and PROTECTING YOUR CAPITAL at all costs when you are wrong!

If you read our Swing Trading BLOG 9and we hope you do) you will tell our traders to "prepare for whatever the market decides to do and act accordingly".

That means be prepared and have a plan for action whether the market does what you expect or not.

Being stubborn and trying to out think the market is a sure way to trading disaster…trust me!

Ok so now that the lecture is over lets take a look at the charts!

Almost everything on the board RIPPED right along with the market this week.

The most important lesson to gain from looking at the charts is to learn how to spot when the SHORT TERM trend changes.

$DIA

Let's take a look at the chart of the "Diamonds" above.

Last Thursday (June 23rd) we saw a big gap down in the AND reversal in the market.

The SELL OFF that day took the market down to an area that was near the low we saw on June 15th.

Once the market traded down to that level the market "reversed" and closed very near the high of the day.

Friday (June 25th) the market didn't do much as it traded sideways on low volume.

It is at this point that we as traders look for signs or clues to see what the market has in store next.

Monday we watched as the market traded higher (albeit or lower volume) which is not a good sign for the SHORTS.

If after seeing a strong reversal followed by a sideways trading day and UP day in the market doesn't give you a very loud hint that a retrace is upon you then I am not sure what will!

Tuesday the market GAPS UP (another clue) and trades in an nice orderly up trend all day (yet another clue).

Once you notice all the clues or hints you need to take action based on your observation.

For some of you that action meant to cover your SHORTS at a loss.

For others it meant to cover and GET LONG.

Our trading plan may not match you trading plan.

Our plan has us stopping out of our SHORTS and entering into some LONG positions in STRONG STOCKS.

In last weeks BLOG POST we mentioned some of the STRONG STOCKS that we were watching this week.

Take a look at the charts of the stocks we mentioned in that post and see how they did.

We have gone from VERY WEAK to VERY STRONG in the market in one week flat!

Expect some increased volatility ahead as traders try to get a handle on where we go from here.

As always be prepared for ANYTHING!!!

Until next week…Good Trading to YOU!

Swing Trading Week in Review – November 26, 2010

Sunday, November 28th, 2010

Swing Trading BLOG – Swing Trading BOOT CAMP

As the holiday shortened week came to end the markets appear to be a bit indecisive about which way they want to go from here.

The market was a bit choppy this week with a big GAP DOWN on Tuesday and then a big GAP UP on Wednesday.

The market of course was closed on Thursday but hen Friday morning rolled around traders we confronted with yet another GAP DOWN.

SPY - ETF Swing Trading

This "choppy" price action is a bit to be expected during a holiday week so it should be interesting to see what happens when we open for trading on Monday.

Last week we told you that our belief is that we are at a pivotal point in the market and this week has done nothing to change our mind.

All three major indices are still trading above their 50 day SMA's and some of the individual sectors are acting very well.

This is a good sign for the "Bulls".

On the flip side though is the fact that we are continuing to see more SHORT trade setups then we have in awhile.

It feels like the "Bears" are sitting on the sidelines and licking their chops waiting for the time to pounce.

Like we said last week how the market follows through from here will be the key.

Make sure you have a list of possible SHORTS and LONGS for next week.

Be prepared for whatever the market does from here and simply take action when it does.

Until next week…Good Trading to YOU!

Swing Trading Week in Review – November 5, 2010

Sunday, November 7th, 2010

Swing Trading Blog – Swing Trading BOOT CAMP


Finally!!!

Swing Traders got the breakout they have been waiting for as the market traded to NEW HIGHS for the year this week.

As you would expect most of the sectors followed suit by rallying higher this week as well.

DIA

The sector ETF's making NEW HIGHS for the year this week were Agriculture ($DBA $MOO), Energy ($XLE), Real Estate ($IYR), Semiconductors ($SMH), Airlines ($FAA) and Technology ($XLK).

SIlver ($SLV) and Gold ($GLD) also rallied to NEW HIGHS as did the Gold Miners ($GDX).

Another interesting thing to take notice of is that there is finally some strength coming into the weakest sectors.

The Financials ($XLF $IYF) and the Hombuilders ($XHB) ETF's broke through key overhead resistance levels this week.

IYF XHB

The Broker/Dealer ETF ($IAI) also broke through the resistance in the $25-$27 area.

IAI

All of these ETF's broke through these prior resistance levels on BIG volume!

Follow through is the key but the amount of volume we saw at the end of last week in a hopefully a sign of good things to come.

In last weeks BLOG POST we told you that there were a TON of stocks pulling back nicely off of their most recent highs.

Hopefully you were able to get into some of these trades this week.

There were loads of what we call "text book" swing trades to take this week.

A few stocks with favorable risk/reward setups were $MEE, $EC, $ANN, $GS, $BBY, $SKS and $APC to name a few.

GS

$SPG ripped and even $F was a rock star this week!

F

There were some stocks that actually rolled over this week but with the market breaking out to new highs we have no need to focus on the SHORT side.

Although we will continue to watch BOTH sides of the market to determine overall strength and weakness just remember that CONTEXT is the KEY that allows you to take action.

CONTEXT tells us the market is way too strong to try to fight it but that being said it is also warning us NOT to chase it up at this point!

If for some reason you missed last weeks action BE PATIENT and wait for your trades to set up for you.

Sometimes it is hard to sit and wait when the market is moving up the way it is but often times that is the smartest thing to do.

Until next week…Good Trading to YOU!

Swing Trading Week in Review – April 30, 2010

Saturday, May 1st, 2010

After making NEW YEARLY HIGHS on Monday the market finished down almost 1.8% this week.

Sellers came out in force on Tuesday but the market quickly rebounded Wednesday and Thursday.

The low volume "rebound" came to end on Friday as sellers stepped in again creating a sell off that drove the market down right until the closing bell.

Dow Jones Index 4/30/10

As far as individual sectors go, the Financial ETF's (XLF, IAI, IYF), all made another move lower this week.

We have been watching this sector closely since the negative news came out about Goldman Sachs.

Last week we noticed, and posted to our blog, that the Financial ETF's were not showing much strength as the market made its move up on Thursday and Friday.

The follow through to the down side started on Monday allowing us go LONG the Inverse Financial ETF (FAZ) for a nice short term swing trade.

FAZ - Swing Trading ETF

After hitting resistance at the short term double top FAZ pulled back a bit and continued its UP move on Friday.

Another sector we have been watching closely is the Steel sector.

We began to notice the Steel ETF (SLX) was possibly running out of steam during the market move to new highs on April 14th and 15th.

SLX never made it to new highs as the market rallied and actually begin to sell off as the market made its new high on the 15th.

The weakness continued last week and as the market again rallied to NEW HIGHS by Friday, SLX made an unimpressive bounce off of the 50 Day SMA.

When the sellers stepped in on Tuesday this week SLX sold off right out of the gate and never looked back.

The "Gap Down and Go" as we call it created a "lower high" and was a good opportunity for a SHORT Swing Trade in this sector.

SLX - Swing Trading ETF

So what do we do going into next week?

With the market putting in its first significant "lower high" this week we will continue to look for signs of follow through to the down side.

As always though we will continue to look for opportunities on both the LONG and SHORT side of the market just in case the market finds its legs again and makes a run back towards the highs.

Just remember that being prepared for ANYTHING and EVERYTHING increases your chances of trading success.

Until next week…Good trading to YOU!

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