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!
Well, another week of market gains. We don't have to believe it, but we sure shouldn't fight it. Are we extended? Sure we are. Is there froth? You bet. Does it matter? NOPE! Now, our job is to neither be bulls or bears, our job is to be opportunists.
So let's talk first about the potential cracks I see. Now, it's important to remember. These cracks should eventually turn into opportunities, but we have to be patient. What is interesting about this week, is for the first time in several weeks, I had an equal # of shorts as longs. All were working well. What I am getting at, and you probably have already figured it out. Play the pattern, NOT THE MKT.
What I really want to get across in today's brunch is that it isn't about the broad move. It's about the setups. Yes, I believe we're overdue for a correction, and yes I am taking setups on short side. However I am also eying some longs.
Let's take a step back for a second and rehash just why we do this Brunch. First of all, lots of emotion out there. Let's all just put that down and remember we're all in the same battle. Arguing does not help anyone make money. The reason I do StockTwits brunch is to help people navigate the tape. 99% of info out there crushes people in either tape, but understanding HOW to play the tape is what keeps people in the game.
Point is...We can argue all we want, but rather than trying to determine where the world is going. Why don't we just focus on trades? Whether it's manipulated, short covering, summer solstice or what I ate for breakfast. It is what it is. Let's not forget what JMK said. Market can remain irrational, longer than you can remain solvent.
We have been following SMH for some time. It will be very important to watch closely how this sets up. http://twitpic.com/4uf1u The semis led the tech run, and were solid movers. They are now pulling back. I want to see this turn into healthy prudent entries. SMH Daily pullback is deep, but so far constructive. I want to see it setup. Stocks within will tell us. http://twitpic.com/4uf6v
So if SMH is getting hit, it makes sense that NAZ is looking precarious and tired. http://twitpic.com/4ufh4
So, the fact that technology has been the technically superior, the fact that it is pulling back is healthy, so far.It tells us to be aware of this filtering through other sectors as the leader takes a step back.
Another sector that is showing cracks...finally...is retail. http://twitpic.com/4ufoh This has been on a tear, but not because it's been under massive accumulation rather it has been short infested. Shorts gave up. In full disclosure, I am short XRT
So, if we have technology showing signs of being tired, and we have retail finally cracking, how about the heart on this market body? The heart is still ticking strong and therefor we MUST respect that. http://twitpic.com/4ufyu Finally, finally the XLF is in an area where it makes sense to see some significant sideways action, digesting that move. I have seen people getting CRUSHED shorting this whole move while the fins told us the ticker was still beating strong. They have now come back to Nov/Dec 08 level which was filled with massive emotion. Short them here? Not for me, there are easier trades. They may come down again soon, but so far it's been a losing bet.
So, with tech and retail showing signs of being tired, and fins coming into a clear resistance point. Are we done or is this rotation? So where is money rotating too? This is a pattern I want to own. http://twitpic.com/4ugiq
OK, so we have some cracks in the QQQQ and XRT. But we also have solid breaks OIH. We have a heart coming into resistance. And yes, we're extended. So play it close to the chest. Identify your opportunities, set your stops and get after it. So rather than discuss what is not, let's just talk about what is and study some charts. They're pictures and letters people.
If a short like FDO setups up. Take it. http://twitpic.com/4ugta Disclosure: Short FDO
Or, if ALL sets up for a long. Take it. http://twitpic.com/4ugw9
Here are some from my trading desk for the coming week.
AMT broke trend and is hanging below. I like the risk reward here quite a bit. http://twitpic.com/4uhgq
Here's another I am watching and would like to enter. AOC big break and hanging . http://twitpic.com/4uhvt
CHK breaks long base after an emotional shake. Note that we played 'emotion' with FCX. Similar break. http://twitpic.com/4ui14
GOOG is extended. No reason to do chart here. No real support until $375.
Per request FFG. It is not for me, due to stop being quite a way's away. http://twitpic.com/4uicg
Per request. PX http://twitpic.com/4uifk
Per request. ERTS Something is wrong here. Should have followed through by now. http://twitpic.com/4uijh
Per request. DV hanging by a thread. Have to look at weekly here. http://twitpic.com/4uio8
Per request. SLB one of the strongest out there. http://twitpic.com/4uisi
Per request. Entire restaurant sector. http://twitpic.com/4uiw5
Per request. FDX weekly a GREAT chart for review to keep things in perspective. http://twitpic.com/4uj7u
Per request. KBR daily extended but weekly beaut. Needs pull back and prudent entry. http://twitpic.com/4ul43
Per request. SNDA one of the strongest around. http://twitpic.com/4ul8r
I like the USO on a clear break of lateral trend. http://twitpic.com/4ulbq
I am long GHL waiting to add. Stop around $74 now.
Here's another one, KSU, I am looking at long. By now you probably can see I have longs and shorts on tape for this week. http://twitpic.com/4ujoc
If we continue to squeeze this week. We must watch Commercial Real Estate. I think I have attempted this one 3 or 4 times. EQR It looks ready if we squeeze higher. http://twitpic.com/4uk0w
Another one on my radar. PLD http://twitpic.com/4uk63
TMO another long I am looking at here. http://twitpic.com/4ukph
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