With the bulk of earnings season in the books, the economic focus this week will shift decidedly from micro to macro, with the mid-term elections, FOMC meeting, and employment data undoubtedly occupying the top stories of both the general news and financial media. Whereas I am extremely cautious holding stocks through earnings reports which have distinct tangible affects on price action, the macroeconomic implications that are set to take the spotlight this week will consist largely of noise, at least from a swing trader’s perspective.
As difficult as it may seem, we cannot let noise distract us from the task at hand, which is to always respect the prevailing price action in the market. As I discussed in my Friday evening videos, the past two and a half weeks have allowed the S&P 500 to churn sideways. Much to the chagrin of top-callers, the broad market has strongly resisted a steep correction. Moreover, we continue to see impressive underlying strength in many individual names. While no trend lasts forever, I believe that the S&P could just as easily blow-off to 1200, or even 1220 (52 week highs at 1219), before seeing that 5% correction, as it could “sell the news” in the face of this upcoming week’s events.
Hence, I prefer to keep erring on the side of the prevailing trend until I am given more of a reason to turn bearish than a few weeks of sideways action.
Below, you will find my top setups for the upcoming week. Feel free to pick and choose whichever ones best fit your style. Please keep in mind that these are trading ideas only. I also urge you to use stop losses in order to mitigate your downside risk. In general, I prefer a trailing 7-8% stop loss, unless otherwise indicated on my annotated charts.
I hope you find these ideas helpful.
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Interesting to see half of the 12631 team long steel names, the other half short.
Too much of generalization?
Great picks. I’ve been watching RBCN for a while now due to it’s huge short position. I caught a 10% or so move up a few weeks ago in the name and am now waiting for another good entry. This could be it.
Keep up the good work.
Interesting picks. Two I like but steel makes me nervous here.
Thanks Chess, own HMIN and AAPL. May add. LIke the set ups. Let the games begin! Remember to protect yourself at all times. LOL
It should be quite a week, with elections on Tuesday and Fed meeting Wednesday and monthly jobs report Friday.
Chess, looking at CLF. Do you prefer AKS over CLF?
I like AKS better because I think there is an easier gap fill.
AFF not looking bad either
Nice.
Nice list. Still trying to recover from trick or treating last night. Thanks.
SCHN sells a lot of scrap to China.