Weekend Video Analysis 04/05/14

Direct Vimeo Link Click Here

Enjoy this two-part educational series with Steve Nison on your Saturday morning.

https://www.youtube.com/watch?v=VKtGeZUjLWo

https://www.youtube.com/watch?v=nL0vMJ-pNXU

We had another day of the Dow Jones Industrial Average and S&P 500 Index printing fresh all-time highs even as the momentum leaders housed largely in the Nasdaq Composite Index and Russell 2000 faced another bout of heavy selling pressure. Headed into next week, the main issue is how this spread will resolve itself. Judging by today’s action, bears may finally have more than just a hope and a prayer, especially given the morning gap higher which faded quickly.

It was an intense week, if only for the various ways in which I shuffled around my chips inside our 12631 Trading Service, which @RaginCajun and I direct.

I can assure you that a membership to 12631 is well worth its price over the long run.

The way we see it, the big winners will eventually take care of itself–What we care about most is mitigating downside and not being stubborn with losers, and not taking on unnecessary risks. In addition, we strive to preserve a top shelf, quality atmosphere for traders of all backgrounds. We fuse together actionable idea flow with a constant emphasis on proper risk management techniques in our streaming, Twitter-like, state of the art chat room.

Please click on this 12631 hyperlink for more details about joining our great team of traders at a very reasonable price.

Also, be sure to catch my next Weekly Strategy Session. Please click here for details about joining. Please also note that members of our 12631 Trading Service receive the Strategy Session each weekend at no additional cost.

See you there.

Have a great weekend!

One of the critical issues still facing us is whether firm mega caps, such as the resurgent McDonald’s, can continue to act as a hideout for large capital seeking a safe home amid the pain being seen in the high growth issues.

You can see plainly for yourself on the daily chart, below, how resilience McD’s is today.

Elsewhere, keep an eye on Goldman Sachs and JP Morgan to follow Citi lower next week.

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I bought some UVXY here, inside 12631 just now, looking for volatility to play catch-up to the carnage in the momentum names.

It is a gutsy play into the weekend, with quite a few momentum names oversold. Keep in mind, though, that the Dow and S&P both printed fresh all-time highs this morning. So, it is not like I am buying volatility at the end of a 10% broad market correction, or anything close to it.

I also do not see too many traders in a rush to by volatility here, leading me to continue to think we are looking at a complacent market.

My stop is under $55.

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Suddenly, the momentum and leading parts of the market feel like they are on their last legs.

In reality, though, they are likely close to a short-term bottom, such as NFLX YELP, etc.. However, I am not convinced yet they are near durable bottoms to the point where I want to step in front of them here.

In fact, my strategy is now shifting even more towards targeting the holdout, resilient parts of the market which I believe will succumb to the leadership selling imminently.

Also keep an eye on the VXX and other volatility instruments. They are still quite soft, all things considered. Complacency or a bullish divergence? You know which way I lean.

Drop me your top Friday afternoon ideas.