It was great to see some two way action this week after the Bernanke speak on Wednesday putting in at least a short term top in the indices. At this point the uptrend remains fully in tact and I don’t think theres any question there but this week at a minimum did give us our first warning sign, albeit a small one. It was a good week for my trading account as I was able to get some nice short positions in on wednesday which basically made my week. I look forward to the potential vol entering the markets. Now onto the charts.
Not a whole lot to say this time around in many of these charts mostly because they are in the middle of their ranges. Or possibly because I was busy outside of trading this past week and I am just getting back into the swing of things today. Anyway here is what I am looking at:
$SPY same trend different day. Not too much to narrate here. Fairly steep intraday pullback off new morning highs today. consolidating above the 21EMA on the 30 minute. A break above or below this mini afternoon range should get a retest of todays highs or a retest of the top of last weeks range.
I wrote in last weekends update that I was coming into the week with a short bias on the hunt for sell setups and boy how wrong I was. The market continued to grind higher proving day after day that the NFP gap was for real. begin rant: [Notice I did have an opinion on how the week might unfold but I still needed to FIND setups to confirm my thesis– I didn’t come into the week blindly selling everything because of my own beliefs. It’s fine to be wrong just don’t say wrong] /rant
I thought it was a fairly difficult trading week compared to most recently. We finally saw some back and forth action and if you stuck around too long in one direction you quickly found yourself giving all of your profits back. Some decent long trades in AMZN and NFLX offset my net losing apple trades this week to finish out with a small gain for the week. Now onto some charts!
NOTE: The charts below are all 30-min candles.
$SPY great squeeze higher on friday off the NFP number. I do think its overall bullish however in the short term I do not thing its sustainable. Any moderate to large gap ups on Monday I will be aggressively searching for short setups for a trade. I do not believe this is a breakaway gap.
NOTE: The charts below are all 15-min candles.
$SPY pulling back off it’s highs after double topping around the 159.7 level. Next level of support comes in about 157.75 and I wouldn’t be surprised to see us test that tomorrow. ECB news tomorrow AM and then jobs numbers on Friday should give the algos a reason to whip price around.
NOTE: The charts below are all 15-min candles.
$SPY lower highs and lower lows. As simple as that. To the bulls credit we did manage to basically recover Mondays lows and the 155.1 pivot by the end of the day but we’re clearly still in this downtrend on the 15 minute. If we can hold above 155 tomorrow it would seem we will try to carve out a little range here between 155 and 157. Time will tell, my sense is some two way action around here. https://www.tradingview.com/x/iizecuZw/
$SPY Have to be bullish here given Fridays action. The bears surely probed the downside in the morning but a strong rally off the lows and close at the highs negates all or most of the bears effort. Might need to go sideways here a bit at 158.8ish resistance but MM gets us back near highs. https://www.tradingview.com/x/qiFZ8FTC/
Continuation of , Why I am buying apple on Monday
So far we have a successful price reversal at our anticipated inflection point and things are looking good (knock on wood).
As I mentioned in the previous post I bought 1/3ish size on friday aftermarket at 525.24 and I added up to a full position this morning picking up more in the 517s. My average cost now comes in about 520.50.
Because I am a daytrader at heart I do have a full ‘intraday’ size and I am looking to trade around a core swing position. For those who are simply looking to swing you can use todays low as your stop and continue to trail your stop if price continues higher.
For those interested in my intraday targets I am currently looking to peel this extra size off at about the 526.5 level and continue to trade around position and below 520 I would take off half my position. Note this is a bit more difficult when I do believe the market will continue to work against us for the next few days. All the while I do have a small SPXU position I picked up late on Friday.
Here’s why I am looking to buy AAPL on Monday.
- Inverted head and shoulders setup seen above on a 240 minute chart.
- 518 – 525 is the buy zone I am anticipating a long entry.
- 61.8% retracement from the 504.75 low to 555 ripper we saw this week comes in about 524.
- Previous swing point from early December (created left shoulder) about 518.
- Also 518 coincides with the previous break out area that ignited the move this past Monday
- Finally take a look at this chart posted by @hftalert whose work I do subscribe too, http://www.hftalert.com/aapl_lows.htm
I actually purchased 1/3 position Friday after hours as apple continued to slide down at 525.21. I will look to make that a full position on Monday and I will be using roughly 515 as a stop. Trading below 515 would indicate to me the lows want to get tested again. Again this is just a trade, not a stance that I am married too, simply risk/reward and probabilities aligning here for my personal risk tolerance and trade style.