________
The pullback this morning is a very good start to what you would like to see as a swing trader. We may not get too much more of a dip from here, but even a 1% broad market sell-off goes a long way in helping to tighten up many extended charts in the course of an uptrend.
A few names that I have at the top of my list of scans:
$BBEP $CBI $CF $LULU (now it’s a long play) $UA
Comments »
I am going to hold off on offering any long swing trading setups for now, pursuant to the ideas discussed in my weekend videos. In essence, should we see immediate continued strength in the early part of this week, I would look to further layer out of the long exposure that I have left on the table. Alternatively, if we see a few quiet days of sideways action, or better yet a pullback to the 1190-1205 area on the S&P 500, we will likely see some sound swing trading setups on the long side present themselves again. Should that latter scenario materialize, I will post setups of stocks that have broken out and subsequently pulled back to what should be good support zones.
The market is clearly very healthy at this point, as the 200 period weekly moving average has been recaptured by the bulls on the S&P for the first time in nearly 30 months (!). Swing trading in an established uptrend appears easy on the surface, but it is important to take profits and raise cash when sentiment and price start to get a little bit out of hand. By no means is this a form of calling a major top. Instead, it is how I choose to actively manage a swing trading style in a trending market.
While the temptation may to be look at those inverse ETFs once it appears the market will come in a bit, I believe you should exercise a good deal of discipline in that area. Given the bullish developments in the market of late, any bearish bets on equities should be made with the understanding that you are fighting a potent overarching trend, and should thus be kept on a very tight leash in terms of both stops and timeframes.
Comments »I’d like to express my gratitude to one of my loyal readers, “GYSC,” who decided to join The PPT based, in part, on my work here. If you are curious about what The PPT is, please click on the following link and decide if it is for you (be sure to scroll down and watch my video at the bottom, guiding you through the premium service): http://ppt.ibankcoin.com/ppt_pitch.php
The two videos below offer my analysis on the broad market as of this past week. If the videos are too small for you to view here, then you can simply double-click on the screens and watch them on YouTube.
_____________
[youtube:http://www.youtube.com/watch?v=RGgognoeCsE 450 300]r_____________
[youtube:http://www.youtube.com/watch?v=Ar37efD7jf0 450 300]r Comments »While I am sure you know by now that I do not advocate fighting a strong trend, that does not mean we can simply bury our heads in the sand and buy stocks. In this video, I offer my thoughts on the $QQQQ ETF, for the Nasdaq 100 (I said Nasdaq Composite in the video). Also note that $AAPL has played a key role in the outperformance of the Q’s. Nonetheless, just as the final holdout bears are throwing in the towel on the short side, the Q’s are rapidly approaching that major October, 2007 top.
In other words, color me a whole lot more neutral in the coming days and possibly next two weeks or so.
_________
[youtube:http://www.youtube.com/watch?v=7zqDF0HU4eA 450 300]r Comments »I sold off 1/4 of my $DDS position. The name took a while to get going, but I am up nicely on it now. I will likely layer out on further strength.
Trade time-stamped in The PPT.
___________
TOTAL PORTFOLIO:
EQUITIES/ETF’s: 20%
CASH: 80%
Comments »
______________
MARKET WRAP UP 11/04/10
The recent three week string of doji, indecisive candles resolved to the upside today, as the S&P 500 finished up 1.93% to 1221, marking fresh 52 week highs. Breadth and volume were both strong, as the morning gap higher undoubtedly caught bears and underinvested bulls by surprise, forcing many of them to throw in the towel and chase stocks higher. In addition to the industrial/materials/energy complex leading the way higher, financials actually broke out of their long, multi-quarter trading range today. Whether that breakout holds remains to be seen, but here again we see another part of the market where bears were caught leaning the wrong way.
Days like today illustrate the significance of both identifying and respecting a trending market. A key part of the respect that a trend commands is resisting the urge to declare that a major inflection point is upon us. As an example, despite how impressive some of the bottom calls that Doug Kass made in 2009 and earlier this year were, if you had followed him and gone “all-in short” over the past few days, you would be licking some deep wounds right now. The idea is not to taunt Mr. Kass for an errant call, but rather to emphasize that Mr. Market has a knack for making a fool out of everyone. However, there are ways to minimize the amount of times that you get caught leaning in the wrong direction. One way is to admit that, while we are in an uptrend, being either long or in cash are the only two viable options for anything more than a day trade, and vice versa for downtrends.
Nonetheless, as I noted early today, the S&P breached its upper Bollinger Band. In and of itself, that is not enough evidence to call a top. However, I believe it to be a sufficient reason to postpone and new purchases on the long side until we see how price reacts to this development. With the jobs number set to be released tomorrow, the few remaining bears will be looking for that now elusive “sell the news” reaction. Should we gap higher once gain tomorrow, I believe it would then be correct to start aggressively locking in profits, which would likely coincide with capitulating bears and underinvested bulls reaching a crescendo.
______________
______________
______________
______________
______________
______________
