Market Talk

We'd be shocked if SPY didn't visit the 50 SMA -- 113.2 was the support and it's basing on it right now, usually a sign of further weakness.



However having said that we still like the long day-trades on support -- again, it all has to do with time-frame. We won't do any swing longs until we get to the 50 SMA on SPY but until then we've been enjoying some decent day-trades long.

When the time comes that no buyers show up when they should then we'll get worried. Until then though, business as usual. We've traded most (but not all) of these off support today:







Position update: we're currently flat in all accounts but will most likely put on some swing trades on the 50 SMA/SPY

Morning Notes

Decent bounce this morning especially in tech, regional banks, and health care stocks.

CAT bounced on the 20 SMA -- going forward this is an area stock needs to hold.




GS 164 another area we'll be watching as a tell for the market.




Lots of earnings this week so stay on your toes.

Signs to watch for in regards to change of sentiment

We have been buying support aggressively (day-trade mostly but also some swing) in the last little while and thus far it has worked like magic. as almost every support spot we have listed from the night before found buyers. This is for us the most important thing to watch for going forward -- are support buyers going to still step in as they have in the last few months?

To us this is even a better gauge of bullishness than break-out continuation. Break-outs often fail in bull markets when traders get antsy or think market has gone up too much, too fast. But major support not holding is a much more accurate sign of a change in sentiment.

We have dozens of support spots going into this week -- as soon as these stop working we will back off completely. But until then we will enjoy it for as long as it lasts: buying support with a 15-20 cent stop and easily making a point on good size (on $30-$40 stock, add a zero for GOOG type prices). It's quite possible that we've made more in the last 4 weeks than we will in the next 2 months -- we're prepared for that and know that you have to respect the market's moods. When it's this easy we will keep hitting it hard but when the strategy suddenly ceases to work then we will immediately step-back and re-assess.

This week in some ways for us will be pivotal as we are close to many important support spots. We'll be watching like hawks to see if support on our alerts hold or whether some real signs of weakness creep back into the market.

Market Talk

We found 34 (!) support plays for the Sunday newsletter. Some we like for day-trades, some for swing.

The saying "Be careful what you wish for" came to mind as we were salivating over some of these support plays. Of course we are cognizant of the possibility that support might not hold as well it has been in the last few months. However we imagine that the the bulls will put up a good fight before that day comes, and that there will be enough warning signs to keep fast little fish like us out of harm's way.

Enjoy the long weekend and rest up as there should be some decent action next week.

HCPG

Market talk

Our guess is that the lows hold here for today, we base early next week near 113.2 and then go through to test SPY 112. The more support is tested, the weaker it becomes.

Triggers

These are ALL the stocks that hit our alerts (thus far at 11:45 AM) from last night's newsletter. All worked except one (CRK) Many good day-trading opportunities. Two notes: a) Buy the first test, but never the second (so if they revisit our alert lows we would not buy them) and b) We're not swinging anything today, as we believe that we will see lower prices.

Support buying

We had TSL YGE support buys in our focus last night in the newsletter, and also posted in our twitter account yesterday.


YGE off the 50 SMA, very oversold after heavy sell-off on news yesterday:



We bought first time near 15/S1 bounce, were going to stop out at low of day, but were also watching out for a possible quick dip and over -- which happened on that second test and on which we added with a stop on the low of day, average 15.08. We were completely out of the position as the stock went to 15.5 -- not much but our initial risk was just over a dime.




TSL similar idea as we wrote yesterday we wanted to buy 49 reversal -- exactly what happened today:





We tried TSL near 49 bounce (9:46), got stopped out within a minute, and bought again on the next retest (9:50) -- stop was always around 10 cents. We took the last of the position off near 50 for over a point. All this was recorded live on our twitter account.




Also bought very small starter positions on JRCC CRK near the 20 SMA /50 SMA lines, respectively, but expecting some pain in these two and will not add until the 200 SMA.




Update: We changed our mind and sold the JRCC CRK flat. We'll come into market next week fresh and re-assess.

Today's triggers

Day is young but we had two good alerts already trigger:


WYNN had been in our newsletter for days and as posted in our twitter account we got long 69.2 yesterday in anticipation of a 70 breakout.





CMG 98 from last night's letter also is working well:




Update one more trigger from last night: AXP 42.5. Stock is right at the trigger but we're not involved. As we wrote in the letter last night financial stocks lend themselves more to swing trading than daytrading and we're not in the mood to swing trade this stock.

Today's triggers

May the bull market live on. All the triggers from last night's newsletter -- white arrow indicates the support buy price listed in newsletter. We weren't involved in all of these, for example we didn't buy AAPL this morning at 205, but these are all the alerts that triggered.

Lots of levels now that bulls have to defend -- next sell-off most likely will not be this easy.

Trade updates

We traded the plan from last night from the blog post and newsletter picks. It worked very well and once again buying support in this bull market paid well.

We have sold all the positions we added into this rally and some partials from yesterday (CTRP sold into the open, WYNN took some off, sold partial DRYS) are now left with small core positions we'll keep -- with stops probably around today's low on most of them.

The arrows represent the buy spots we either put in newsletter or in the blog post last night.

Today we kicked ass -- but we are fully aware that a day will come when we're going to get our asses kicked from buying support. Until then, enjoy.

Update: we sold the rest into this rally and are now completely flat in all accounts.

New positions

As you know we sold most of our swings yesterday (CAT DTG PCU CVX), and as we posted to our account this morning we also sold remaining positions (MICC QCOM).

In the late afternoon we started filling up our empty swing account with starter positions on the following stocks all close to support, be it daily support, 20 SMA or 50 SMA. The only stock we did not buy on support was WYNN, anticipating a 70 break-out. We would add on all the other stocks on further support but with WYNN we would be stopped out through today's low as there is no support nearby for a while.

APC on the 20 SMA, will add on 50 SMA if this level does not hold.



CHK near the 20 SMA, would add at 50 SMA.




CNQ on the 20 SMA, would add at 70 and then 50 SMA if level does not hold:




CTRP we bought very late in the day on the 50 SMA -- we'd probably get out of this position on weakness through 70 and possibly try again at 68 support.




MOS we bought in support area, would add at 61



PCU we sold yesterday close to 37 and picked up today at 34.87. We would add to this position on 34



SU we bought on the 20 SMA test, would add on 50 SMA



UPL we bought on 50 support but would add at 49 on 50 SMA



WYNN we bought not near support but on anticipation of break-out. We wouldn't add to this position and if weakness would sell through today's low.



The best thing for us would be if these levels hold and we rally tomorrow (already in the money for most of the positions thanks to a late day rally). The worst thing for us would not be weakness tomorrow but instead flat action. Why? Because if we selloff tomorrow we would be very oversold on most of these stocks -- we would add (all positions are starter 25% positions thus far), lower our average, and most likely get a nice bounce. However if the stocks do nothing but base at these levels then most likely we will go lower without any meaningful bounce for a while. Consolidation is never a good thing when you're buying support.

Evening Update

As we posted this afternoon we sold all of our swings save MICC QCOM (sold CAT CVX DTG PCU) as we are looking for a further pull-back in the markets.

We still have many nice-looking charts but few of them are ready for prime-action (at least in the commodity space -- there are a few non-commodities that look good that we've been tracking for a while).

We're also looking to pick-up some commodity trades on support tomorrow so are hoping for a bit more weakness into the open.

Also going to watch some of the leader stocks tomorrow to see if they can hold support (GOOG on 50 SMA, AAPL on 208 support, GS on 50 SMA, etc.)

We posted this morning that today could very well be a short-term top (especially in commodities) and we're looking for consolidation. As we wrote late last week, we won't get too concerned until there is a broad selloff across multiple sectors without rotation. Until then all we're going to do is to switch capital from one sector into another.

Until tomorrow HCPG/BTG

CAT swing

We posted this chart last week (Jan 07) on Chart.ly (and posted our entry at 2:07 PM of same day) on our account




Sold it today into the rally:



As you know we mostly day-trade but once in a while we like to swing these type of old-school stocks that need to be held for a few days. Lovely base on the stock -- we'd like to get back in on a re-test.