In this video we take a look at the overall market conditions and some of the strongest ETFs that are leading the market higher.
We look at the $DIA as it starts to trade into an area of possible overhead resistance.
We see how the Financials ($XLF $IYF), Broker/Dealers ($IAI), Real Estate ($IYR), and Homebuilders ($XHB) are showing tremendous relative strength.
Swing Trading BLOG – Swing Trading BOOT CAMP
Well 2013 started with a BANG now didn't it?
This holiday shortened week started out with a rally on BIG VOLUME on Monday.
The price action we saw created a bullish engulfing bar on the charts. This type of chart pattern was a sign for the shorts to cover as the longs pilled in!
Once the news of the fiscal cliff deal came out the marked GAPPED UP in a big way on Wednesday after being closed Tuesday.
This GAP UP left a lot of traders scratching there heads on where they could enter into the move.
As a SHORT TERM trader the day to get long was on Monday…not on Wednesday.
The move that happened Wednesday classifies as a continuation move for us.
We were looking to SELL our SHORT TERM trades towards the end of the week…not enter into new positions.
As you look through the charts you will see nearly the same chart pattern on each one of them.
The sector ETF's look the same although some were better candidates then others.
The Financials ($XLF $IYF) and Homebuilders ($XHB) had some nice setups.
The Steel ETF ($SLX) also had a nice pattern to trade if you caught it in time.
As far as individual stocks go there are too many to list. Lets just say that there were tons of good looking charts out there to trade. ($GOOG, $NSC, $GS, $MA, $V, etc)
Next week will be the true test to see how real this rally is.
Keep you eyes on stocks that start to pullback to see how the hold up in relation to the overall market.
If the rally continues there will be plenty of time for more good trades.
There is no need to chase the market up.
As always have a plan and prepare for whatever the market throws your way.
Until next week…Good Trading to YOU!
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After starting the week on the down side both the DJIA and the S&P turned around on Wednesday.
Both indices finished the week with two days of modest gains.
The NASDAQ lagged behind a bit despite a few bright spots in the tech sector.
This latest move puts some of the sector ETF's back above their 50 day SMA's and has all three major indices trading right at theirs.
For short term traders that focus on price action and volume the move that happened on Wednesday was a good indication that the UP momentum would continue.
The DJIA was the best indicator of things to come.
The early morning sell off quickly turned into a reversal which had the short sellers covering their positions once again by days end.
This day formed a bullish engulfing bar in the DJIA with impressive volume to boot.
Once this continuation pattern was evident it was a good chance to look to the LONG side for some short term trades.
If you trade the ETF's then $XLF, $IYF and $SMH had good chart patterns to trade.
If you were looking for individual stocks then $APC, $$NBL, $ARG, and $VAR were on the radar.
Just remember that we are in SHORT TERM trade mode.
Quick trades…get in and get out. We are not holding our positions with the long term outlook in mind.
We have a lot to consider as we move into trading next week.
There is still significant overhead resistance to contend with.
The NASDAQ is not really participating with much conviction in these UP moves.
Just some food for thought!
Don't try to outguess the market.
Let price and volume tell the story and act accordingly.
Until next week…Good Trading to YOU!
Swing Trading BLOG – Swing Trading BOOT CAMP
First things first…
Happy Thanksgiving! We hope you and your family enjoyed your holiday!
The markets opened with a bang this holiday shortened week.
Monday traders watched as the market GAPPED UP after weeks of relentless selling pressure.
The move was somewhat expected (as we mentioned in last weeks post) since the market was trading in severely OVERSOLD territory.
All three indices traded basically drifted higher on LOW VOLUME the entire week.
You can argue of course that this low volume is to be expected on a holiday week but we know that it is also a telltale sign of a retrace in down trending market.
The "bounce" was a big one nonetheless.
The Dow Jones Industrial Average rallied over 400 points in fact.
The sellers have taken a break (for now at least) and that is a good thing.
The thing to remember though is that we are still in a text book DOWN TREND.
This latest "bounce" was a retrace on LOW VOLUME.
So what happens from here after such a big bounce?
Who knows.
Some people are calling for the BEAR to lose steam and the BULL to return.
More are saying prepare for a lengthy BEAR market by getting your SHORT strategies ready to launch.
What do we say?
We say…WHO CARES???
As short term traders we need to be ready for whatever the market decides to do regardless of direction.
We are NOT investors.
If the market rallies higher? Great I have a strategy for that.
If the market starts to sell off again? Perfect because I have a strategy for that.
In last weeks BLOG post we gave you the details of our trading plan for this past week.
It played out almost exactly as we described.
Our remaining SHORT positions were stopped out so we were flat going into Tuesday,
The stocks that we mentioned that were showing signs of strength ($K, $V, $CREE, $FB) made some nice moves higher.
Did we jump onto the LONG side?
Not at all. We traded our plan and our plan was to reevaluate after the retrace was confirmed.
The gap up and drift higher scenario would have kept us out of the market anyway.
In hindsight the moves in these stocks would have produced some nice profits.
Our strategy (in this case) was not to buy stocks on a "bounce" in a strong down trend.
We followed our strategy and watched the market for the last 3 days of the week without doing anything expect getting ready for the next move.
Next week we will be watching to see if the down trend shows signs of returning.
If it does we will get SHORT all over again.
If the market shows signs of change (from BEAR to BULL) we will be prepared with a list of LONGS to jump into.
We always try to teach you you be prepared for anything and act accordingly when its time.
This upcoming week is no different!
Until then…Good Trading to YOU!
© Swing Trading Boot Camp 2024
