Happy Fathers Day !

Without the aid of a crystal ball, a trader can only watch price action in the indices and major sector components to gauge a market bias. If you are a member of http://Daytraderbootcamp.com or follow us on twitter you already have an edge. My advice would be to check out Ron’s two week free trial and meet the traders in the chat. Ron calls the market live, which is as close to a crystal ball as a trader can expect.

That said, where can we expect the markets to go with seasonality in full swing and prices close to high recent highs? With a 25% move off the November 2012 lows, almost all #DTBC members were comfortable with a pullback of 5% or more. I expected we could eventually see more as did one of our more experienced members who sees a possible retrace to 1550. His weekly summary will be available at some point before the open tomorrow. Fathers are busy today.

We can debate where we will see buyers return in force. One could point to Thursday’s breadth of 9.875 towards the close and how many were caught by surprise. We are clearly at a decision point, which I point out in the weekly video below.

Enjoy and happy trading -CV

If you are a member of http://daytraderbootcamp it is no surprise to you that we anticipated the recent pullback and subsequent bounce on the SPY. We also profited handsomely.

That said, now that we’ve bounced, we will be looking for breadth to confirm the move off the November ascending trend line where we negotiated support with the bears mid-week. A good number on breadth, borrowing from @ukalrewitz of 9:1 would signal a less cautious stance short term, while we await a test of the highs or resumption of this move lower down to 1600.

You can read Ukarlewitz summary for the week here.

Here is my Sunday video including a watch list from assorted components of the XLE and XLF. You can also skip to the watch list midway through the video if you don’t care about the reasons behind the trades.

Looking for 1600, perhaps a dead cat first then 1600 for 5% from the highs.

With under 10 minutes left until the open, the main takeaway for the video below is the Consumer Staples Sector (XLP).

I see no sell signals (distribution days) yet and with a lot of institutional investors in bonds (safety) there is a lot of smart money that can rotate into stocks.

Happy Trading -CV

Again, another that met the criteria, heavily shorted junk on bases. This ripped from 17.30-21.91. Overdone in the short term. The thing I like the most, is the fact that today marks the first time this dog has visited the 200ma in over 1 year. I see this as a “Lay-up” short. MAX PAIN 22.50. This must not only break that 200, but also the long term resistance at 22.10 and the recent high of 22.48. Entry anywhere from 21.90-21-10. First target shall be the 38% retrace at 19.65, target 2 is at 18.95 the 50%. If this is to lose the long term support at 18.80, all I can say is look out below. I am short 2k at 21.37.

I really like this chart. The weekly is even better, just a nice nice base. GS is out this am initiating with a neutral. Low floater of 42 mill shares, which is heavily shorted at 35%. I have support at 40.40, that would be MAX PAIN.

Wish I wasn’t so bearish on the market here, as I would take a sizable position in this one, but I like an entry between 41.50-42.70. First target would be the gap fill at 44.44 with res at 44.80 as well. PPO was 70 this time last year. Has a lot of ground to make up. If I don’t trade it this time, I will be monitoring closely during next markt pullback for the entry.

Eyeballing the short. The Gold futures have had trouble at the target area of 1473. We have a mere dead cat bounce here from 130.51-143.43. Should stall/rollover again.

Love the short entry between 141.63-143. MAX PAIN stops are at 145.50. First target would be 140.50 the 10ema, then looking for the gap. Target two is the entrance at 139.79, then the fill for target three is at 138.37. The next major support under us is at 138.50. A tighter stop would be 144…

Down -80 overnight right smack into the next support number at 1430. After losing -100.30 on Frydays session and down another 80 tonight. Pretty crazy I’d say, but this is how the shiny rock trades.

Unfortunately I am long a piece of the GLD from 147.75. A half sized position so far. Certainly a continuation move in the overnight trade. Two days and down -170 handles. I want to see how it trades tomorrow before I make any decision on this. Bloodbaths like this are when I like to buy the blood, but this time I am very early to the knife fight. The 1430 spot is decent support. Ultimately, I think this is going to 1255 before any kind of a real bottom as we have spoken about for some time, but as always, there will be bounces.

This was a planned trade waiting for 1518 which arrived, but is just not working. Might try some trade repair on this if the price action is “right” early on Monday.

I see a big move coming. Which way? We shall let price action tell us. If this tape is weak today and we see continuation on the market this can get nailed under yesterdays lows of 697.11. The next major support is at 685 which could easily be seen today if a bloodbath hits. The ATR on this is 12 bucks. Under that 685, and all hell could break loose and we could see a fall to 645 then 634.
Now the upside trade is if the tape holds up, and we see good volume early, the true entry would be over 707.62 and into the gap, I would front-run that # and try for a better entry. First target would be 710 res, then the gap fill at 713.50, and maybe new all time highs. Really depends on Mr. Mkt.

I am short here at 394.26 . All time highs are 399.10, so I will use breaking over 400 as my MAX PAIN for a stop. 396 is resistance here, and has struggled with it a tad past four days. Today during some blood in the market it sold off hard to the 10ema at 391.85. Under that 10ema I see blood.

Short entry between 394-396 first target is the 10ema at 391.80, then the 50ema on the 30 minute chart at 388.90 for target two. The next support comes in at 385.50 for target three. Not to mention the 38% retrace is at 376 if things turned ugly in the market. Great R/R here a 4-5 point stop for a +10-20 trade in a few days.

I cover the Shippers that look good and a dozen or so Utilities. Some are setup already while a few need stochastic to recycle.

I find it interesting that new comes out as we touched the 127 extension on the SPX recent pivots.

With the XBD double topping at long term resistance of 110, I am looking here for a short. Obvious entry would be the loss of 152.01. I have 154 as long term resistance, so I would rather get as close as possible to there. On the 30min the 20/50ema’s are at 153.70. MAX PAIN would be a break over 157.19. First target is support of 147.30. Second target would be the 50ma at 144.60′s, but if it got there, I would suspect target three of 137.60 to get tested If this market turns on a dime and things get nasty for a couple of days, This could fall very hard. I prefer to use common, but the March 150 puts look enticing at .95

I posted a three line break chart the end of this week. Despite all the indications of a possible inverted head and shoulders pattern on the 30 minute SPY and SPX charts, one has to be cognizant of the fact that point and figure isn’t bullish yet. That said there indications bulls have some things on their side as well.

I will wait and see what happens early this week.

Indices saw selling again yesterday. We can debate the reasons, but not the result.

Sequester – Noun
A general cut in government spending.

This is the week that cuts take effect, Friday March 1st. It could go either way so, I covered a few health care stocks that could see a reactionary move. MET, AET, UNH

Watch the VIX and put/call ratio among other things. Note Gold and COT data. Prices are moving higher but commercials are exiting positions into strength. This weeks video covers GLD, bullish percents, SPY, SPX, COMPQ, and a dozen watch list positions.

Watchlist – TAP, PEP, CL, ADSK, EWC, TSM, WDC, STX, MET, AET, UNH

Arthur Hill on Friday pointed out a potential “bearish failure swing” on several sectors and indices.

“RSI FAILURE SWINGS TAKE SHAPE IN XLY, SPY, XHB AND IGN… Welles Wilder, creator of RSI, featured bullish and bearish failure swings in his classic book, New Concepts in Technical Trading Systems. According to Wilder, these failure swings form in RSI and are independent of price action. A bullish failure swing occurs when RSI moves below 30 to become oversold, bounces above 30, pulls back, fails to break 30 again and then advances above the prior peak. It basically signals the start of an uptrend in RSI. A bearish failure swing occurs when RSI moves above 70 to become overbought, declines below 70, bounces, fails to break 70 again and then declines below the most recent trough. This sequence signals the start of a downtrend in RSI.”

Check your RSI on Sectors where you’re looking at potential setups. Be wary where this signal could turn bearish.

Below is my Sunday Video and Watchlist. I am watching Healthcare (XLV), some Energy (XLE) and Pharma names with particular focus on names that might be affected by the looming sequester on March 1st.

Happy Trading and Well Wishes to the boss, Ron @gtotoy -CV

PS Send him a tweet, I’m sure it lifts his spirits. We miss you man.

The S&P continues to baffle a lot of traders, myself included, continuing its march higher, seemingly undeterred by market news. The QQQ’s also had a nice break of resistance and now trades just above its Bollinger Bands. Finance pulled back a bit towards the end of the week, while semis shined. I also noted IYT made a nice move as did one of my favorite stocks in the sector, JBHT.

Watch list stocks include. JBHT, WDC, STX, ADI, TXN, TSM, NTAP and VNO.

Happy Trading -CV

Markets continue to impress. We tested 1496 and the 10 EMA on Friday and closed right near this ascending two year trend line.

1525 point and figure resistance is just overhead. The market is strong and futures are pretty much flat to slightly higher at 8:30PM EST.

No predictions, just looking for a sign which way this train is headed.

Happy Trading -CV

I have been in cash for the better of a week and a half. The SPX was rejected at the upper trend line of this rising wedge, settling this evening near 1496. A long term resistance (PnF) level is above the wedge at 1525. ADX appears to be losing momentum as well.

Drawing fibs from the recent pivots I see the 127 extension at 1541. See chart below.

If this weren’t enough I noticed yesterday the equal measured move we’ve put in since the November lows, a ratio trade if you will. See the Ichimoku chart below, note RSI and chikou. A fade yesterday, in hindsight, made sense as we neared this upper trend line.

I’ve made much of the Demark 9, 13 and now additional 9 count. We faded on the 9. See my chart below and note the % pullback areas and targets. If we move higher so be it as I am planning ahead.

Everything tells me we should pull in a bit, yet we continue to see strength. Add to that, the market doesn’t care what I think and you have reason to be confused. The only thing we can do is trade the tape. Overbought can certainly get more overbought.

Happy Trading – Cousin_Vinny

Every trader is different. Some scan, some don’t.

I won’t pretend to know what goes through the trader’s minds that I follow, but what we have in common is what I cover herein. When scans produce similar setups for my favorite traders and their watch lists reflect some of my trades, I’ve found my setups have a higher probability of success. After my list is ready for my notebook watchlist, the last thing I do is check GTO’s charts. As a member of DayTraderBootcamp you have an exhaustive chart library at your finger tips. Support and Resistance levels, patterns, chart notes, short percent, EPS dates, etc. These charts are worth the monthly subscription alone.

During the day I have a tweetdeck window open where I monitor these traders and compare notes.

Some of the sites I use, in no particular order are below the video:

http://daytraderbootcamp.com chatroom
http://finviz.com
http://stockcharts.com
http://stocktwits.com
http://tradesignalonline.com
http://freestockcharts.com
http://barcharts.com

I hope the video helps you understand my thought process. And, Nicholas you came to a great site. Good luck to you mon ami.

Happy Trading -CV