Running for Cover

Another Monday gap higher has index shorts running for cover. This recurring pattern has largely kept me away from the index levered short ETF’s of late, as well as the volatility ETF’s, opting to take on individual shorts or inter-market opportunities. I took off the final piece of my Russia short for a loss this morning, after locking in part of it for a gain intraday on Friday.

While there are not a plethora of stocks which are set-up properly, I am focusing on the ones which are, such as Facebook. Also keep that UA setup I mentioned last night on your radar.

In soft commodity land, corn is off to a good start this morning, as is coffee.

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The following is just a small excerpt from my latest Weekly Strategy Session (please click on that hyperlink for details about trying it out). which I published for members and 12631 subscribers this past Sunday.

Last weekend’s Strategy Session noted that many European bourses were quite oversold and thus ripe for quick, tradable bounce for aggressive traders.

On the updated Germany country ETF, note the bounce that ensued for much of last week. 

However, Friday saw a very heavy sell volume day, and the chart could easily be bear-flagging before another leg down.

Hence, traders should view any counter-trend plays as rallies to be sold, until further notice, rather than as buy-and-hold trades.  

Please click here to continue reading

In the event we see a further rally this week, here are some actionable long ideas which are heavily-shorted.

Please click the screen shot below for a larger view of my “12631 FINISH HIM! SHORT KILLER SCREEN” inside The PPT. Obviously these stocks are going to have the highest percentage of shorts and, according to the algorithm, are set up well to squeeze further.

If this bull goes buck wild, this is a great idea screen.

Members can click here to view and save it.

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Under Armour remains a viable long idea over $70, basing high and tight on the first daily chart, below.

On the short side, MasterCard below $75 to potentially break multi-month rising channel lower would likely bring me into the trade.

Drop me your top tickers overnight.

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DDD is a chart which shows the concept of “overhead supply,” or trapped buyers from a well-defined levels hitting the exits once they are mode whole, working by the book. You can see the horizontal purple on the first daily chart, below. Once buyers were made whole from the last time we touched that level, they could not sell shares fast enough–This is the essence of overhead supply

Also note the confirmed head and shoulders top still very much in play for the momentum 3D printing play. The risk is still  that this stock is on “the other side of the mountain,” in terms of the momentum now being to the downside.

Conversely, Disney is a stock which I turned cautious on way too early. The quarterly chart, second below, shows what happens when a stock has a “blue sky” breakout, with no prior price resistance of which to speak.

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