Posts Tagged ‘XHB’

Swing Trading Week in Review – June 25, 2010

Friday, June 25th, 2010

Swing Trading Blog Post-

Well after the markets last "mini" rally off of the February lows that market finally put in long awaited and much anticipated pullback this week.

DIA - Diamonds ETF

The two "weak" sectors, Retail (RTH) and the Homebuilders (XHB), we highlighted in last weeks BLOG POST (and in last Friday nights webinar) sold off nicely and actually made NEW LOWS as the market pulled back this week.

RTH - Retail ETF XHB - Homebuilders ETF

Coming into this week there were several SHORT Swing Trade setups in some of the stocks the these "weak" sectors.

WSM, WMT, JCG, ANF and many others were on our SHORT Watch list this week and they all moved nicely to the down side.

The "strong" stocks we talked about last week (AKAM, ALK, NTAP) all pulled back with the overall market this week.

The strongest sector we discussed at the webinar last Friday was GOLD and the GOLD MINERS.

After a nice run up last week you saw most of the stocks and ETF's in this sector put in a short retrace from Monday through Wednesday this week.

GDX - Gold Miners ETF

On Thursday we got our entry signal for several stocks but lets take a look at Newmont Mining (NEM) since this stock seemed to be the leader of the pack in the last UP move.

NEM - Long Swing Trade

NEM BROKE OUT to new multi-year highs last week so were "stalking" this stock waiting for another opportunity to GET LONG after a decent pullback.

Here is how the chart looked last Friday.

NEM - Long Swing Trade

After this nice strong UP move through the previous high (black line) we waited for the first pullback.

That pullback started on Monday and we watched price firm up a bit by the close on Wednesday as it traded around the area of the previous high.

We were watching this previous "resistance" level to now become the new "support" level.

NEW - Long Swing Trade

We still need price action to confirm that this area would hold as "support" and we received this confirmation on Thursday morning.

Right out of the gate on Thursday NEM traded through the high of the previous day ($59.43) giving us an entry signal at $59.45.

NEM moved up for most of the morning only to close the day well below the open.

Another intraday reversal!

Here is how the chart of NEM looked by the close of the trading day on Thursday.

NEM - Long Swing Trade

Price and volume were both increasing but the end of day reversal made it a little tougher for us to determine if the volume was bullish or bearish.

The next day we needed to see the signs that NEM was going to move higher.

Today (Friday) we got exactly what we needed from NEM.

Price moved higher on increasing volume throughout the day.

NEM - Long Swing Trade

Early this afternoon we were able to piece out of some of our position in NEM at the $61.67 level.

We are trailing our stop in NEM based on our BREAKOUT strategy rules and will exit the rest of our position just as our plan and this strategy dictates.

NEM is breaking out to NEW HIGHS once again and the sector as a whole is showing some tremendous strength so we are hoping to see some nice follow through next week.

Speaking of next week it seems that we are really at a pivotal point in the overall market.

We have taken out the last "swing high' and rallied up to (but still under) the 50 day SMA.

We are now in the process of pulling back from the high of the recent up move.

Another run up towards the 50 day SMA wouldn't surprise us at all.

On the flip side though there are still a lot of "weak" looking chart patterns and a some stocks and sectors making NEW LOWS.

So what is a SHORT TERM TRADER to do?

Be prepared for anything!

You have heard that somewhere before right? (this BLOG over and over and over)

As always we will have a list of STRONG and WEAK stocks and sectors on our Watch list  for Monday.

That way no matter what the market decides to do we can take the appropriate action and get ourselves on the right side of the market.

Until next week…GOOD TRADING TO YOU!

P.S. Feel free to join us Friday July 2nd at 6pm for our next "Weekly Wrap Up" webinar.

You can click HERE to register!

Swing Trading Week in Review – April 23, 2010

Friday, April 23rd, 2010

NEW HIGHS…YET AGAIN!

Last Friday when the news came out about Goldman Sachs a lot of traders (including us) started to wonder if the market would finally pullback after a bit of negative news.

Well this week the market spoke LOUD and CLEAR by finishing a strong week at NEW HIGHS for the year.

That makes this an almost 1400 point rally since "that reversal day" which happened on February 5th.

DJIA 1400 Point Rally

As far as individual sectors go the FInancial ETF's (XLF, IYF, IAI) all had a strong week but DID NOT make news highs with the market.

The Semiconductors ETF (SMH), which broke out last week, had a lackluster week but we will continue to watch for follow through to the upside.

The Oil services (OIH) and Energy ETF's (XLE) finally broke to the upside this week.

OIH ETF - Swing Trading Break Out

A few weeks ago in this blog we posted about the relative strength we were seeing in the Homebuilders ETF (XHB).

This week XHB setup another very nice swing trade opportunity.

We posted the details about the trade HERE but lets look at the chart.

XHB - ETF Swing Trade

With the market being this strong there were a TON of individual names that were UP strong this week.

The Retail sector was particularly strong with stocks like JWN, SKS, TIF and several others having a great week.

So will the incredible strength in these sectors and the overall market continue as we move into next week?

Of course no one knows for so just continue to listen to the market and position yourself accordingly.

DO NOT get complacent and let your guard down.

Follow your plan and your trading rules and be prepared for ANYTHING.

Until next week…Good Trading to YOU!

Swing Trading Week in Review – March 26, 2010

Friday, March 26th, 2010

Is this the market that never stops?

This is the kind of rally that a lot of traders find very difficult to trade.

"But everything has gone straight up!"… you might say.

Yes and that is the PROBLEM!

When a market rallies like it has, for the last month or so, traders that missed the initial move are STILL WAITING for the market to "take a breather" and pullback so they can get LONG!

To sum it up…THEY HAVE MISSED THE BOAT!

Now I will agree that the rally we have seen is a bit atypical and at times it seems that you would be chasing the market if you entered into any new LONG trades.

I will argue, however, that if you look at the chart patterns and price action of some of the ETF's and individual stocks you will have found plenty of opportunity to BUY strong stocks.

This is one of the main reason we like Swing Trading ETF's and individual stocks.

We can compare their performance against the overall market.

We can determine whether a sector ETF or stock is "STRONG" or "WEAK" in relation to the market.

Our Swing Trading Blog (the one you are reading right now) posts a "Week in Review" every Friday.

Using just the information posted on that blog last week you could have had a great starting point to locate some swing trades this week.

For the last two weeks we posted to the blog that the Oil and Energy ETF's (OIH and XLE) did NOT seem like they wanted to participate in the recent rally (Relative WEAKNESS).

Not the best time to look for SHORT setups since the market is making NEW HIGHS so what about STRONG sectors?

Last week we also posted on the blog that Real Estate, Retail and Gaming have been some of the strongest sectors (Relative STRENGTH) out there.

We also posted a Swing Trading chart of XHB, the homebuilders sector ETF, which has also been a very strong sector lately.

We told you we would continue to watch these strong sectors as well as the major stocks in these sectors for swing trading setups.

On Monday morning the market gapped down but never broke through last Fridays low.

Once it held this low you should have been looking to get LONG if the market were to continue its strong rally UP.

This is where a lot of traders "miss the boat".

After Fridays HIGH VOLUME sell off they think that the market has finally started to "pullback" or "retrace".

These traders then start doing their nightly scans for stocks to trade the next day.

The problem is they are looking for SHORT trades and do not even consider looking for stocks to BUY.

Because of this they are NOT prepared when the market proves them wrong (like it did).

Because of this they missed swing trade setups in stocks like WYNN, LVS, MGM, DRE, KIM and O (all from last weeks blog).

And probably also missed the swing trade opportunity when XHB gapped down into support (see charts) and then rallied nicely to NEW HIGHS!

XHB Swing Trading ETF

The next they know the market moves UP strong and they are FLAT (no positions)!

The market moves up again the next day and they don't want to "chase the market " so again they dont do anything but sit and watch.

This is exactly how you miss big moves in the market like we have had over the last month!

Just remember, we never KNOW for certain what the market WILL do!

And like I said last week, as swing traders, we need to be prepared for WHATEVER the market decides to do.

That way once the market decides we, as traders, can simply follow and make the appropriate decisions.

Until next week…do your homework and BE PREPARED FOR ANYTHING!

And as always…Good Trading to YOU!

Swing Trading Week in Review – March 19, 2010

Friday, March 19th, 2010

Well after the indices continued to rally and make NEW HIGHS for the year early in the week, the market finally ran into some selling pressure on Friday.

The interesting thing to notice, also on Friday, was the HIGH VOLUME the accompanied the sell off.

A few sectors actually started their sell offs a day earlier.

Last week we posted that we noticed that the Energy, Oil and Semiconductor sectors did NOT participate in the recent rally.

And while the Semiconductors (SMH) actually started to show some strength early in the week both the Energy (XLE) and Oil (OIH) ETF's sold off sharply on Thursday and Friday.

Some of the strongest sectors during this last rally, Retail and Gaming, had mediocre weeks but look good moving forward into next week.

Keep an eye on the Retail stocks, the RTH and gaming stocks like MGM, LVS, and WYNN.

One sector that continues to rally strong is Real Estate.

IYR, and stocks like KIM, DRE, O and SPG, all had a good week and also show some potential new BUY set ups for next week.

The Homebuilder sector, (XHB), which has also been showing tremendous strength after breaking above the $16.40 level, has an interesting chart going into next week.

XHB Swing Trading ETF

You can see how XHB ran up to just over $17 after it finally broke out above the $16.40 level.

XHB did sell off a bit on Thursday and Friday on relatively light volume.

This is the exact situation you want to see during a pullback AFTER a BREAKOUT!

As XHB pulls back into the BREAKOUT level of $16.40 we will look for this previous RESISTANCE LEVEL to hold as a new SUPPORT LEVEL.

So after Fridays HIGH VOLUME SELL OFF what can we expect next week?

Well it does seem that the market is a bit overdue for a pullback but, as Swing Traders, we need to be prepared for whatever the market decides to do.

Since the market is SO STRONG we will continue to look for LONG Swing trade set ups in STRONG stocks that are trading in the STRONGEST sectors.

Until next week…Good Trading to you!

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