Charts

Here are some charts we like with arrows as entry points. All oversold and heading into support:

Email if you want Recap

We're writing a two part newsletter and first part is a recap of our positions today plus our strategy going forward.

If you want a copy please email us at info AT highchartpatterns DOT COM

and we will forward you the newsletter.

HCPG

Our positions

We had a list of support spots to buy coming into today -- at first we were going to day-trade them on reversals but noticing how heavy the tape was we decided to put on smaller starter positions swing (our starter positions are always 25% of full positions).

Here are all our positions. We won't add today -- in the unlikely event that we bounce from these lows, great. If not, then we expect to take some pain and add at next support zones sometime this week -- and thus most likely our targets will be rallies back to resistance (which was support today) for the over-shoot strategy.

The most important thing here is not to add any more today in order to reserve gun-powder as this pull-back feels more serious.

Note we already took some profits on RGLD BTU AA












Added starter positions also on MDR AGU

Commodity support love-fest

Look at these charts representing semis, metals and miners, coal, steel, oil companies, and gold miners. Support thus far has held on all of them -- there are the lines of the sand going forward. We buy the first test (today) but never the second test (if immed after) so none of these will be valid if hit again tomorrow. Our regret is not hitting support long trades harder this morning as it is very rare for multiple sectors to hit support and fail simultaneously.

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.