Disclaimer: The majority of these ideas come from the @Tickerville Saturday morning brunch. In fact, many of these are direct quotes that I use as a check-point during the week. Trade at your own risk. Any reference to "I" is from @tickerville. The blog author did not grammatically update that piece.
**Thanks to StockTwits for hosting. An excellent venue!
Good morning traders! How is everyone this morning? It's 10am; do you know where your charts are??
Indexes extended their gains this week but does that mean I am fighting the tape here? No sir, but I have effectively gone to cash, booked solid gains and am sidelined.
Let me mark up the S&P and show you why. Many lines on this pup worth noting. Lots going on here. Take a moment to really study it. You can see we're in a clear resistance point. http://twitpic.com/3irvq/full
Don't be confused by Friday's volume ala Options induced. Had it not been expiration, volume would have been quite low.
Now, that is the SPY, but let's takes a look at a few other danger signs that say we should be on guard.
Safe to say we have nailed the semis and been there before most. Now they're coming into key resistance area. http://twitpic.com/3is3n/full
There are 2 more warning signs I am seeing. One in the heart and soul of the tape that has kept us long until recently.
The leaders, XLF have been outstanding. Now they're coming into significant overhead resistance. http://twitpic.com/3is8w/full
And, finally the Dow is bumping up against its mother trend. Will it break the first time or need a breather? http://twitpic.com/3ise2
For weeks you have heard me ride the trend. I am not a fighter of the tape, but now I am retreating to the sidelines for a bit. I will wait and watch and see how it shakes out. I will be looking for constructive pullbacks for entry. The tape remains bullish, but needs to digest. Best case would be a pull back that goes deeper than we expect. This is why I am so inclined to keep an eye on the 2002 lows line noted in the S&P chart. If a pullback gets nasty this point makes sense.
Now, we MUST remember that the trend is our friend and right now the intermediate term trend is up. Trends can last longer than we expect. So we must be eying prudent risk reward regardless of what the big picture says. If we take trades and get stopped out, so be it.
We'll go over ideas for the coming week in a bit. First a few more big picture thoughts. I see many people licking their lips wanting to short again. Day trading that is fine, but we must respect what is happening on the chart.
QQQQ demands our respect. We must change our longer term idea from shorting to buying. http://twitpic.com/3isx1
The world is talking inflation, global slow down, depression and blah, while tech is breaking out of the strongest pattern known. A group I want to chat a bit about are the commods. After weeks of battle they are finally breaking. We have to observe and respect.
SLX two time frames, finally starting to show some life. http://twitpic.com/3itas and http://twitpic.com/3itb0 OIH is another that has quietly started to make itself known. Like SLX, I want to see how this break is handled http://twitpic.com/3itws/full
So what is interesting to note about SLX and OIH is that they are finally joining the party. They have actually lagged technically. I want to play them but I want to see how they react as the other major averages are hitting resistance. I am in none of them currently.
Hmmm, lot's of questions about taking shorts here. Let's hash that out a bit. One of the biggest challenges I see with traders is that they feel they must always be involved in a trade. If you can effectively switch sides in an instant with absolutely no anxiety or frustration whatsoever than with defined risk its game on.
But most cannot do that. Rather than look to short when we come into resistance, why not just step aside and lighten up a bit? If you start shorting and you are early, ala wrong, not only will you get hit financially, but emotionally too. Most traders I have seen have not capitalized on this run because they have been more interested in finding the turn down than playing up. Has this been you? How come?
At this point, please understand my thesis. I have had a great run, new all time highs again. Indices at resistance, time to wait it out. If we pull back as the charts suggest we may. We evaluate the opportunities for long side entry. If this comes we take them. If we pull back and start to break down. Shorts will setup like crazy and we'll switch to that side minting money on a downside slide.
OK, let's get back to the charts. If anyone has any thoughts on the previous, please let me know. Always a good topic to discuss.
CBG The real estate trades have been fantastic. http://twitpic.com/3iuq6
SPG Per request @Upsidetrader I played this break and enjoyed the run. Sold it about $5 too early. Geeze http://twitpic.com/3iut3
PG Not one for me. http://twitpic.com/3iv0w
AAPL not for me here. http://twitpic.com/3iv54
You will see that most of the leadership stocks are extended and not for me. Another reason I have moved to cash.
ZLC http://twitpic.com/3iva9 I played and prefer TIF but am now out after nice run. Looking for a remount.
The hangman on FLY on Friday would keep me away.
Last week we spoke of BA. Per request, an update. http://twitpic.com/3ivi0
FLS http://twitpic.com/3ivmt One I like quite a bit, if it gives me entry.
Best way to see my ongoing take with GLD is Tape Talk. http://bit.ly/9SxoN Not to bunt but I cover it at length.
OK, I think I hit all the cue, how about some ideas I'm watching for the week ahead. I doubt I'll do much this week as I observe the action from sidelines, but let's run through some potential gems.
GRMN has been consolidating nicely within a key area saying break coming. Direction doesn't matter. http://twitpic.com/3iwcq
A I like the emotional break here. I played it and am now looking for re-entry. http://twitpic.com/3iwrg
If OIH is breaking, the components must be watched. Here is DO http://twitpic.com/3ix8k
I want to be in SLB with a stop at the mother trend line. http://twitpic.com/3ixd0
Last within the OIH space is RIG. Now if these breaks start failing, they will be excellent shorts. http://twitpic.com/3ixh7/full
Last week our mystery chart was a bust. It was BTU. I played the initial break and was stopped the same day. A lesson in discipline. We broke the anxiety down quite a bit in BTU and you can see the failed breakout here. http://twitpic.com/3ixs4
Last week we ran out of time before I got into new leadership. Let's rehash some weeklies we must continue to respect.
GHL is one of the best weekly charts out there. I am long and looking to add. I have a long leash. http://twitpic.com/3iy3p
I am not yet in this stock, but will be. QSII another one of the top weekly patterns out there. http://twitpic.com/3iyak
Last but not least. This was a mystery chart from some time ago. It is breaking and I am long. NVEC http://twitpic.com/3iyfn
Last on the idea front, if BA continues to act well, look for PCP to break towards trend. http://twitpic.com/3iymm
Alright all, 15 minutes left. Any other requests to hit before we start closing up shop? Geesh every week gets better and better love it
Interesting SWC http://twitpic.com/3iz2l
PCLN http://twitpic.com/3iz6y
It would be wrong of me not to include my favorite short opportunity. ADM http://twitpic.com/3izc5
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