Trading Game Plan
The SPY new highs on lighter volume continues to drive active traders crazy.
To say we are in a stock pickers market would be an understatement. What does this mean for your trading game plan? It means be disciplined with your best ideas. The stock market averages continue to defy classic price action by melting higher.
The bottom line is there are no sellers. Dow Theory is out the window, the Transports have been weak for months and yet the market drifts higher. This is the kind of tape that you can lose your shirt if you don’t pay attention.
SPY New Highs Hold the 212 Breakout a Second Day
Trade the Open and Go Home?
The U.S. stock market is up almost 3% year-to-date, and once again is pushing up against all-time highs.
However, it’s important to note that most of those gains came in the first several weeks of the year. Since February, the market hasn’t been able to find much traction for long. Once the S&P 500 SPX, +0.08% starts flirting with new highs, it then dips, and then fights back higher to repeat the process.
In fact, a look at the last three months of the market shows a saw-toothed chart that has had plenty of activity but not a lot to show for it.
Stocks to Trade | Monday May 18, 2015
- SPY breaks through the 212 level on LOWER VOLUME EACH OF THE LAST 3 TRADING DAYS.
- The number of stocks with minimum viable average true range dropped by 20% this morning.
- Healthcare and industrial goods are leading the way the last 2 months.
- Transports IYT and the IWM (Russell 2000) are still lagging. Will this resolve to the upside or finally crack the market?
- SPY new highs are a non-factor to influence any trades. The market is drifting. If we weren’t sitting at new high all we would be talking about is the lack of follow-through.
- Semiconductor stocks showing strength.
Interesting Chart Lessons:
- YUM a perfect technical trigger from our Friday morning Game Plan meeting. We discussed the importance of keep good setups on your watch list from day-to-day and setting alarms. This one trade was worth being a member for the month.
Earnings in play today > 1M avg shares: A, AMCN, JASO, TTWO, URBN
Bullish Ideas ATR/Volume/Price: TSLA, TASR, YUM, CTRP, AMZN, SCTY, NFLX, SPLK, IBM, MA, AET, GS
Bearish Ideas ATR/Volume/Price: WYNN, KSS, UNP, SNDK, Z
Weak Stock Weak Close: DDD, HRB, NAVI
Strong Stock Weak Close: KEY, ZION
Weak Stock Strong Close: HTZ, KBH,
Strong Stock Strong Close: CBI, MBT, NEM, TSLA, YOKU, YUM
20 day Breakdown: DDD
20 Day Breakout: ATVI, BBBY, CBI, HON, NFLX, UPS, YOKU
2x Normal Volume: M, KSS, YOKU, DE, AMAT, SYMC, DHR, NFLX
Core Watch List Longs: ADM>55, PRU, SBUX, ABT, HON, AET, NEM, JNPR, AKAM, BRCM, ADBE>80, EBAY>60, CSCO>30, ALTR
Core Watch List Short: ALL, BBY, TGT, sdnk, dd, glw, lvs, wynn, mgm
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