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Posts Tagged ‘Swing Trading Volume’

Swing Trading Week in Review – August 20, 2010

Sunday, August 22nd, 2010

After the retrace back to the 50 Day SMA last week we saw the DJIA put in a bit of "bounce" to start out this week of trading.

After a nice GAP UP on Tuesday we saw the market stall on Wednesday as it failed to trade above Tuesday's HIGH.

Sellers jumped back into the market on Thursday and pushed the market lower to close the week in negative territory.

In last week's BLOG POST we posted about how we saw the market "transition" last Tuesday and Wednesday.

The type of price action transition we noticed had us looking for some SHORT Swing Trading setups coming into the start of this week.

As the market "bounced" to start the week we patiently waited for the WEAK stocks and ETF's to trigger a SHORT entry.

After posting about the "Inverted Head and Shoulders" chart pattenr in the Financial ETF (XLF) we followed up last week with a nice trade in the Inverse Financial ETF (FAZ).

This week FAZ setup yet another LONG trade entry as the weak Financial sector headed lower again.

Another sector ETF that gave us a clue to look for SHORT trades was the Energy ETF (XLE).

After putting in a nice up move on Tuesday we watching as XLE reversed it's upward move and head straight down on Wednesday on INCREASED VOLUME.

This created a confirmed "lower high" a put our new down channel in place.

This move in the ETF had us looking through the charts of individual stocks in this sector for possible SHORT trade setups Wednesday afternoon.

APC, SLB and CVX all had nice chart patterns with clearly defined risk levels in place.

This is a good example of how to use sector ETF's to look for Swing Trading opportunities in stocks that a closely related or correlated to that sector.

The Oil Services ETF (OIH) had a nearly identical chart pattern.

DO, BHI and NBR we good candidates in this sector.

On the flip side of the coin we saw the GOLD and GOLD MINERS ETF's have a nice week to the UP side as their recent relative strength continues.

Stocks to watch in this sector going forward are AU, EGO, AEM, NEM, ABX, GG, and GG.

Also keep an eye on the Retail ETF (RTH) in the days to come.

We have noticed some strong BUYING in the some of the retail names this week.

This could be a sign of things to come but as always we need confirmation to declare the down trend has come to an end.

As we go into next week there are a few things that we have noticed that have us wondering whether or not this most recent down move has any legs.

We still have a TON of stocks that are holding up (showing relative strength) despite the selling we have witnessed the last two days of this week.

AKAM, MELI, INFA, MO, SNPS, and VRSN to name a few.

Although the DJIA and S&P have technically put in a "lower high" AND "lower low" the Nasdaq has only put in a "lower high" and has yet to confirm a "lower low".

No one knows for sure what we will do come Monday morning so as always be prepared for anything so that you can take the appropriate action when the market tells you it's true intentions.

Until next week…Good Trading to YOU!

P.S

Would like to learn more about how we locate our short term trades in stocks and ETF's?

If so feel free join us Friday, August 27th for our "Finding Swing Trading Opportunities in Today's Market" webinar.

You can register for this absolutely FREE Swing Trading webinar HERE.

Tags: APC, DIA, ETF Swing Trading, Financial ETF, Retail ETF, SHORT SWING TRADING, Swing Trading, Swing Trading Blog, Swing Trading Chart Patterns, Swing Trading Volume, XLE, XLF
Posted in ETF Swing Trading, Swing Trading, Swing Trading Blog, Swing Trading Charts | No Comments »

Swing Trading Week in Review – August 6, 2010

Saturday, August 7th, 2010

The week of going nowhere!

After a decent GAP UP Monday morning the market followed through with…nothing really.

Low volatility and volume usually lead to "sideways" type price action and that is exactly what we saw this week.

The 2 blue arrows above indicate the "double top" area that we posted in last week's BLOG.

Monday morning's GAP UP brought us up above this level and ended up trading above it for almost the entire week.

Friday we saw the market GAP DOWN and then rally a bit only to ROLL OVER to the DOWN SIDE prior to an afternoon reversal which brought the market back over the "double top" area.

Here is a look at the 15 minute chart so you can we what we mean.

Monday through Thursday you can see the "sideways" price action we encountered.

Although the INTRADAY price action was great this type lack of follow thorugh can be very frustrating for Swing Traders.

Most (not all) of our positions did exactly as the market did this week…went almost nowhere.

Although the GAP UP on Monday and the Friday afternoon reversal indicate that there are buyers at this level in the market it is still a sign of overall indecision (so far) to move this market higher or lower.

There are still a lot of stocks that have great chart patterns that my be setting up for some nice trades in the week ahead.

CHKP, NTAP , ALK, BAX and CAL are a few that we will be watching.

The Steel Sector has also been very strong as of late so we will continue to watch SLX, X, CLF, AKS, and STLD.

With the decent rally (and lack of DOWNSIDE follow through) in the GOLD MINERS this week we will watch to see how these stocks shape up during next weeks trading.

A exception to the LOW VOLATILITY theme of this BLOG post this week was the Education Stocks.

APOL, DV, COCO and CECO all had nice chart patterns that setup some great SHORT trades on Tuesday.

Take a look at these charts and you will see great example of the PRICE and VOLUME relationship.

Also as a reminder our next PVT (Price, Volume and Trend Lines) Trading Tactics class will be held next Saturday August 14th.

If learning how to use Price Action and analyze Volume to make trading decisions in stocks and/or ETF's is of interest to you then be sure not to miss it!

Our new Swing Trading BOOTCAMP, Swing Trading Strategy Class, and FREE webinar schedules will be coming out this week so we hope to see you at one (or all) of the upcoming events.

Until next week…Good trading to YOU!

Tags: 50 Day SMA, ABX, AKS, ALK, APOL, BAX, CECO, CLF, COCO, DIA, DV, ETF, ETF Swing Trading, NTAP, SLX, STLD, Swing Trading Blog, Swing Trading Chart Patterns, Swing Trading Price Action, Swing Trading Strategies, Swing Trading Volume, Trend Lines, X
Posted in ETF Swing Trading, Intraday Swing Trading, Swing Trading, Swing Trading Blog, Swing Trading Charts, Technical Analysis | 4 Comments »

Swing Trading Week in Review – July 30th, 2010

Saturday, July 31st, 2010

The markets put in a bit of a retrace this week with both the DJIA and S&P 500 coming off of recent highs.

After last weeks UP move we got a bit of continuation on Monday but, as expected, we quickly ran into some overhead resistance and ended up selling off for the rest of the week.

Like we posted in our BLOG last week when the market put in a "gap down and rip" on July 20th we knew that the SHORT side of the market was NOT the right side (at least in the short term).

The price action and volume on the 20th triggered several LONG trades for us and ultimately stopped us out (most for small profits on break even) of our SHORT positions.

So now that the market was telling us "LONG" we had to start looking for any areas of overhead resistance that may come into play and possibly prevent the market from moving higher.

The price level we focused on was the June 21st high.

This was the day (price level) where the sell off started that ended up taking the market to new yearly lows earlier this month.

As the market moved higher last week and the beginning of this week we were focused on this area as a point where the market could start to lose some steam.

We will use the chart of the Diamonds (DIA) to stay consistent with the chart above.

Tuesday's trading brought the market right up to this level.

This was also the sixth day up in the market hinting that the short term move may be a bit "extended".

Now seeing an "extended" price move that is approaching possible overhead resistance does NOT always mean that a pullback or retrace is imminent.

Just like any other chart pattern you still need CONFIRMATION.

The price action and volume that we saw by the close on Tuesday was a good sign the our analysis may be correct.

The daily range (using True Range not ATR) on Tuesday was the smallest range of the six day rally and volume was a bit higher than the previous day.

This volume action combined with the day closing lower than the open was a "hint" that the sellers may be outweighing the buyers.

We also saw similar price and volume patterns in a lot of other stocks and ETF's.

Wednesday we see price move a bit lower but there is not much conviction as volume and range diminish again.

Thursday is the day that caught most people off guard!

The big GAP UP took price slighty above Tuesday's high (but still under the high of June 21st) and quickly rolled over and sold off most of the day.

We finally received the price and volume action that we needed and the retrace was now confirmed.

Friday we saw the market GAP DOWN but the buyers quickly stepped in driving the market higher intraday but ended up closing down slightly from Thursday's close.

So how could you have used this information?

Well it really depends of your Swing Trading strategy.

At our "Finding Swing Trading Opportunities" webinar last night we actually discussed how identifying price levels can lead to "action" steps in your trading plan.

For example if you were LONG stock's or ETF's (like we were) you could have tightened up your trailing stops.

Or if you Swing Trade both sides of the market (like we do) you could begin looking for potential SHORT trades knowing the possibility of a retrace is near.

We looked at a few of the overbought (using RSI) stocks that setup nicely for a short term pullback.

This is exactly what we do as our strategy, by design, looks for the strongest and weakest stocks and ETF's, and trades them accordingly when the market tells us to.

LONG trades like AXP, ALK, HAL, CAT, AKS and CHKP hit our profit targets so we simply exited our positions.

Sector ETF's TAN and DBA were also very nice trades with clear chart patterns to trade.

The weak stocks on our Watch List were the ones that did NOT participate in the recent rally.

Look at the charts of MRVL, CCMP, VSEA, NVDA, AMAT, ATHR, and SIRO.

These were the stocks to SHORT (if your strategy and plan calls for it) since they were screaming "weakness" during the entire rally.

Identifying price levels in the overall market can be a real asset for traders.

By identifying these levels, and waiting for confirmation. it allows you be in sync with the market which leads to quicker trading decisions and hopefully increased trading profits!

Until next week…Good Trading to YOU!

Tags: ADX, Average True Range (ATR), ETF Swing Trading, RSI, Swing Trading Blog, Swing Trading Chart Patterns, Swing Trading Price Action, Swing Trading Strategies, Swing Trading Volume
Posted in ETF Swing Trading, Swing Trading, Swing Trading Blog, Swing Trading Chart Patterns, Swing Trading Charts, Technical Analysis | 2 Comments »

Swing Trading Week in Review – July 23, 2010

Saturday, July 24th, 2010

Wow! What a difference a week makes!

After last Friday's sell off every talking head in the media was predicting "doom and gloom" and DOW 8000.

When the market closed today you heard nothing but what a GREAT market this is and how we could be headed for new highs!

I have long ago dismissed most of what is said on CNBC, Bloomberg, etc. and watch and listen now solely for entertainment purposes.

As a trader I think it can be very misleading and can often times cloud your decision making process.

Do your own research and follow the rules of the system you put in place based on the result of your research.

I say this because a few traders that I talked to this week said that they were not even looking to the LONG side of the market because "everyone I hear on TV is bearish on the market".

As a short term trader you need to be in sync with market.

By being "in sync" with the market often times you can profit from short term price swings regardless of the overall market environment.

Being prepared for whatever the market does is half the battle.

During our "Swing Trading Weekly Wrap Up" webinar last night there was one question that came up a few times.

A few people asked how we were able identify any LONG trades this week since the overall market was in such a obvious DOWN trend.

These traders, like the ones mentioned above, were also only focused on the SHORT side of the market and essentially missed the move up in the market this week.

Part of our answer to this question is that we ALWAYS have a list of STRONG and WEAK stocks and ETF's on our watchlist.

During the past few weeks we have been mostly focused on the WEAK stocks since we were in a down trending environment.

At the same time though we maintained a list of stocks and ETF's that were showing relative strength to the overall market.

When the market gives us "clues" that it may be transitioning from one mode to the other (in this case from DOWN to UP) we are turn to this list to look for trading opportunities.

For beginning swing traders we always recommend that you trade on the same side of the 50 period SMA as the overall market.

We use this as a "dynamic" trend line to keep new traders on the right side of the market.

So, for example, if the market is trading below the 50 period SMA look for trade setups in stocks and ETF's that are also trading below the 50 period SMA.

When the overall market is trading near the 50 period SMA looking for trade setups on BOTH sides of the market is often times a good idea.

That way when the market gives you confirmation on which way it is headed you can on the right side if the market and take the appropriate trades.

This week we saw this exact setup in the market.

After hitting new yearly lows at the beginning of the month the market put in a decent retrace until July 14th.

The next move DOWN started on the 15th and was followed by a "high volume' sell off last Friday.

During this time most of our SHORT trades (ALL, MET, ZION, LNC, etc.) worked out very well and we were able to take profits in our positions.

Some of our other SHORT positions (SLX, CLF) we a little slower to move to the down side.

Since we are SHORT we need to see a few things to let us know that the trend is still down and going lower.

We need to see price action moving lower and volume moving higher.

This lets us know that sellers are jumping back on board to move prices lower.

Monday the price action in the overall market and in some of our positions was less than impressive.

Volume was significantly less than Friday as well.

Not exactly the follow through you would expect after such a big sell off on Friday.

Our slow moving SLX SHORT actually creates a low volume "inside day"…a classic price stall.

We failed to get what we need to confirm we are still headed lower.

This "stalling" price action gives us our first "clue" and puts us on "high alert" that sentiment MAY change.

These "stalls" dont give us an exit signal from our SHORT positions just yet.

We still need confirming price action (and volume) to take action.

Tuesday's "gap and go" was CLEAR sign that SHORT was the wrong side on the market.

We were able to cover our SHORT in SLX for a tiny profit and our CLF SHORT at break even.

We not only covered our SHORT trade in SLX we actually flipped to the LONG side based on the context of the market and the sector itself.

We did NOT flip to LONG in CLF but we did buy AKS since it had a stronger chart pattern.

Notice the LOW volume 3 day pullback prior to AKS ripping higher.

Both SLX and AKS were trading at their 50 day SMA's and Tuesday UP move created a DOWN trend break out in both as they traded and closed above their 50 day SMA.

These were both "trend transition" type trades and may have been a little difficult for some traders to identify.

There were however plenty of STRONG stocks (trading ABOVE their 50 day SMA) to turn to once the market started its UP move.

Several chip stocks (ALTR, XLXN, MCHP, LLTC) were showing tremendous relative strength lately and offered up some nice trade setups.

Plenty of other stocks presented the same opportunity – HAL, ALK, CRM, AKAM, HMIN, NTAP, AXP, JNPR, and ATVI just to name a few.

Pull up the charts so you can see how these "strong" stocks reacted when the market pushed to the UP side.

Be prepared for anything and everything!

If you want to know exactly how we find the best Swing Trading Setups please join us at our upcoming webinar this Friday night!

You can register HERE!

Until next week…Good Trading to YOU!

Tags: ETF Swing Trading, SLX, Swing Trading, Swing Trading Blog, Swing Trading Chart Patterns, Swing Trading Price Action, Swing Trading Strategies, Swing Trading Volume, Trading Volume
Posted in ETF Swing Trading, Swing Trading, Swing Trading Blog, Swing Trading Chart Patterns, Swing Trading Charts, Technical Analysis | 1 Comment »