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After Profits: What Are They Good For...Absolutely Nothing

Ryan Mallory — Thu, 23 May 2013 19:28:00 +0000

Enjoy my latest rant and first video in quite a few weeks - I found it necessary to get some stuff off of my chest when it comes to one of the most abominable trading habits that I can think of.

It is not that I dont' care about the profits, it is that I don't care about the profits that could have been had after I get out of a trade. Making that your focus only leads to additional problems in your future trades.

Here's my latest rant...

Lazy Trade Long & Short: HLIT & TRV

Ryan Mallory — Thu, 23 May 2013 17:45:00 +0000

Brutal market today, if you played it safe, and executed your stop-losses early on this morning, you likely are to see the stocks rallying much higher at this point (I'll be doing a post on this later so stay tuned).

However, consider yourself a success if you followed the plan of your trade, regardless of what the market has done to you today to stick it to you.

I'm not sure where this market goes from here. I am in a holding position with only one position in the portfolio. There are plenty of people who will tell you otherwise, as if they have a crystal ball, but I'd avoid such prideful traders with such certain beliefs, because such pompous beliefs usually leads their trades down a very uncertain path. Your own beliefs about the market can blind you to a reality that is unfolding without the ability to recognize it.

With that said, I give you today's Lazy Swing-Trades Long & Short. The first is Harmonic (HLIT) that is sporting some nice consolidation at the highs of recent price activity, followed by Travelers (TRV) which is breaking down with a double-top confirmation.

Check out these trade setups.

Fuinhaz $SPY read for May 23, 2013

Fuinhaz — Thu, 23 May 2013 13:11:00 +0000

Well what can I say? History did repeat itself, and like other corrections or pullback it always comes with the elevator cable broken, and a violent free-fall towards lower levels.

What level would the $SPY needs to hold for now (short-term) to help some bulls exit some positions, or even better, feel like yesterday and today gap down are actually a buy the dip opportunity, and that my chart is wrong?

Let's see.

Usually the 1st level that will get tested is the 20ma. On a daily chart, that is represented by the 1627.07 level. That is great if you just look moving averages to help you time your entries. But I don't focus only on moving averages. I like to use Fibonacci retracement levels to help me better time the market. So I personally will be looking for a possible bounce at the 1607.35 (give or take).

Once we test that level, we will shoot back up, and finally reach the 1690.60 level that was not reached. That will most likely suck a lot of new retail traders in who do not follow or have little understanding of charts, and that is when the big money will be made.

These retails investors will be most likely buying everything in their sight, and will end up holding hot bag of potato (not to use any other word). And when the market pullback again and they think that the 1627.07 will hold again, that is when we will flush right through it including the 50ma (1588.52). We will then hold the 1554.00 level that represents the 100ma. Bounce back up just enough to touch the 50ma where everyone is going to say here we go again, and plunge into a bear market.

By that time we will be long into 2014, a few months before Brazil (Emerging Market) starts to badly host the Soccer world cup which I am sure it will be the worst organization ever seen in the history of the FIFA. A lot of world investors will finally have the confirmation that the emerging market countries are a big fiasco, and we will see fireworks exploding left and right. That is when the potato will hit the fan, and we plunge into another crisis.

This is just my theory, but one that I can actually see it happening. But for now, let's just worry about today's numbers.

$SPY 1st support is 164.45, 2nd support 163.35 and 3rd is 161.80.

$SPY 1st target is 166.36 and 2nd is 167.16, 3rd is 167.58, and 4th just for fun is 167.80

Trade what you see, not what you think

The SPX Broadening Ascending Wedge

Springheel Jack — Thu, 23 May 2013 13:00:00 +0000

Most days recently I've been posting a rising channel from the 1536 low, and I posted on twitter yesterday that channel resistance was hit at 1684.6 and there was leeway for a push through to 1685/6.

I was frankly irritated when SPX then reached 1687.18, which was a clear breach of my channel resistance trendline.

I have commented before though that sometimes we see a pinocchio through a smaller pattern or channel trendline to reach a target trendline on a larger pattern, and with that high yesterday the pattern from the November low has finally been clarified. That pattern is a perfect broadening ascending wedge, and you can see that on the SPX 60min chart below:

That being the case, the obvious target for a retracement here is the wedge support trendline in the 1580 area. I would also note that the SPX 50 DMA is now at 1588, the daily lower bollinger band is now at 1569, and there are major broken resistance levels at 1576 (2007 intraday high) and 1597 (rising resistance from 2000 high). There is therefore a major support cluster around the wedge support trendline, and we may well see a reversal there to test the highs and set up a larger double-top for a bigger retracement:

Today's Trading Plan: Emotions Are Ramping Up

Ryan Mallory — Thu, 23 May 2013 12:42:00 +0000

Pre-market update (updated 8:30am eastern):

European markets are trading -2.3% lower.
Asian markets traded 3.9% lower. The NIKKEI alone was down 7.3%.
US futures are trading about 1% lower ahead of the opening bell.

Economic reports due out (all times are eastern): Jobless Claims (8:30am), PMI Manufacturing Index Flash (8:58), FHFA House Price Index (9am), New Home Sales (10am), EIA Natural Gas Report (10:30am), Kansas City Fed Manufacturing Index (11am)

Technical Outlook (SPX):

There is suddenly a huge infusement of bearishness in the markets after China's PMI came in below 50, and Bernanke & company had made references about pulling back their involvement in the markets as early as June.
This is the main reason for the -7% drop Japan's NIKKEI.
Overnight you have a HUGE inverse head and shoulders pattern that has formed on the S&P futures, where if it can get above 1645, the bulls could thereby push this market somewhat higher.
Gap downs are the bears worst enemy. More times than not, they will give up the morning gains. Look for a bottom in the first hour followed by some consolidation and an ultimate push higher.
There is a lot of news out there today, particularly with what we are hearing from the FED from yesterday making a lot of traders very nervous.
We will open up below the 10-day moving average. We will also be trading below the short-term trend-line which support rests at 1655.
The long-term trend-line off of the February lows sits at 1607 today, and likely safe from the reaches of the market.
Huge bearish engulfing pattern on the SPY yesterday.
Incredible volume in the markets yesterday, almost the highest we've seen all year for the SPY.
30-minute chart of the SPX has completely broken down.
Drawing a Fibonacci retracement on the most recent market rally, from the April lows, has a 50% retracement at 1604. A 38.2% retracement would be a 1620.
My biggest concern, and the reason why I think we will ultimately see some consolidation here, is how far removed the SPX is from the rising trend line off of the November lows.
I do have big reservations about whether this market can truly get up to 1700 as quickly as it is trying to do. It has gone straight up since crossing 1600, and bulls have become gluttons in their market outlook.
We are up seven straight months, the last time we saw such a rally was when the market bottomed in 2009.
Markets don't care about the economy. That is not what is driving them. The markets only care about what the Fed is doing to keep equities propped up.
We haven't seen a market pullback in excess of 4% since October/November time-frame.

My Opinions & Trades:

Elliot Wave: Pullback Underway

WaveTrader — Thu, 23 May 2013 09:14:00 +0000

THE PULLBACK IS UNDERWAY

Preamble of my preferred scenario ====> the current pullback does not belong to a “major” reversal pattern, instead I expect just a retracement of the up leg from the April 18 low.

EW Reasons:

The up leg from the April 18 low has not unfolded an impulsive structure therefore it cannot conclude an EWP.

The advance from the November lows should unfold an 11 –wave up leg, therefore there is still one missing up leg.

The current down leg can either unfold a downward pattern ( Zig Zag / Double Zig Zag / Triple Zig Zag) like the four previous ones or a sideways pattern that could form a triangle, in which case it will require a longer time period to be shaped.

Great Day of Trading By Fuinhaz

Ryan Mallory — Wed, 22 May 2013 20:00:00 +0000

Oscar (aka Fuinhaz) is the head day-trader at SharePlanner and boy did he prove why today.

On a day in which the market headed decidedly lower, Fuinhaz managed to capture winner after winner.

Most traders are bleeding through their nose by the surprise that the market gave them today, but with 5 winning trades and 3 losing trades Oscar had a solid day that saw even the losing trades kept at a minimum, and I mean bear minimum, while the winners were let out of their cage and ran until they ran out of steam for a nice gain.

If you are interested in our real-time day-trade and swing-trade alerts for both Oscar's and mine, be sure to try us out at the SharePlanner Splash Zone for a free 7-day trial.

Here's the details of exactly how Oscar traded the day.

What Is Going On Here?

Ryan Mallory — Wed, 22 May 2013 18:53:00 +0000

Bulls don't know whhat to do! It feels like the walls are caving in, the sky is falling and the Mayans were one year early on their end of the world prrediction.

We've sold off as much as 30 points and there is no telling whether there is more ahead.

I was stopped out of one of my positions this morning but it was one that I already had double digit gains in (RLGY for 11%). I tightened the stops on the others, and plan on keepign them all into the close unless some other of my stops are triggered.

While some of the charts on my positions got fouled up some with the broader market action that they were trading in sympathy to, I nonetheless know that based on past precedence we may in fact see this market bounce as soon as tomorrow, particularly since we have yet to see the market sell-off two days in a row in the past month, and each time we have seen a significant sell-off it has resulted in a respectable bounce the next day.

SharePlanner Reversal Indicator: Whoa There

Ryan Mallory — Wed, 22 May 2013 17:46:00 +0000

Reversal Indicator shows price action topping out possibly in the short-term

Today's market action gave us the biggest intraday reversal that we have seen on the S&P 500 this year. At this point the reversal has seen us drop 22 points.

We got as high as 1687 at one point and like I've been saying lately in my daily trading plans, I think it is going to be difficult for us to seamlessly push through the 1700 level, and today that is exactly what I believe was happening when we reversed hard only 13 points from 1700.

The SharePlanner Daily Reversal Indicator shows that we may, at best, start consolidating and more likely setting up for a pullback in the short term. How big that pullback is, I have no clue. It may not be hardly anything at all, but what I think the message to take away from the SPRI here is that the upward momentum is going to slow down some from here.

Here's the SharePlanner Reversal Indicator.

Fuinhaz $SPY read for May 22, 2013

Fuinhaz — Wed, 22 May 2013 13:12:00 +0000

Here I am again with my $SPX chart that I have been anxiously waiting to see it's outcome.

The target have not changed. 1690.60. Something tells me that we will hit the brakes once that level is achieved, but one can only get really bearish if we break below the 23.6% Fibonacci level which is represented by the 1607.50 level.

They say that curiosity is what killed the cat, now I want to see if this rally can survive.

$SPY 1st support is 166.76, 2nd support 166.23 and 3rd is 165.79.

$SPY 1st target is 167.58 and 2nd is 167.80

Trade what you see, not what you think