long setups in a not so long environment

$SPY Tuesday Dump. Wednesday flat. Thursday up. Friday Dump. Fridays dump essentially completed a measured leg down and also broke below the key 163.95 double bottom low we put in the week before. While this is currently a clear break below that level I am very interested to see Monday mornings action. Do we gap down only to have bulls buy aggressively and recover this level?  Do we gap down and see follow through lower? Do we open higher and trap alot of sucked in shorts from friday? Perhaps some sideways around this lower range before really resolving. For me, as I gauge commitment on Monday I will  keep things simple. Below 164 = sellers in control. Above 164 and the bulls still got it. I do like the overnight two way gaps we are starting to see now, some additional opportunity for us daytraders.



$AAPL ended the week where it started but take that relative to the $SPY and bulls get the victory on this one. Thursday we finally saw a very orderly thrust higher above the recent chop and then saw some nice follow through for most of friday until the end of day which could be attributed to overall market weakness and OPEX pinning. I’ve been bullish on apple for the past few weeks and until proven otherwise by the market I remain in that camp. Ideally this nasty candle ending the day friday is reversed quickly by the bulls confirming a breakout retest and continued march higher. Ideally 448 area will hold as the bulls do not want a return into this old range.



$GOOG hovering at the lower end of this developing range, 865 give or take is the line in the sand bulls want to hold onto. This name continues to see profit taking from its massive run up this year and the bears remain in control (on this timeframe) until proven otherwise. With some market strength we could see a push higher to retest the top of this range but all in all i do not have a lot of conviction in this name one way or the other. My sense is there wil ultimately be more downside to be had.



$NFLX great strength here this week as it reclaimed the 220 level and pushed hard off the weeks lows. Nice developing cup and handle pattern that could use more time filling out the handle before attacking the 230 level. I continue to remain bullish on this name and any strength in the indices should set up some nice long side opportunity in Netflix.  However I do believe it needs to rest a bit here as it just ripped $20 from low to high this week.



$FB well there’s the hard reversal day I have been waiting for. It came off a nice double bottom around 23.26 and only took two analyst upgrades to put on a nice short squeeze. I am still a little skeptical on the upside for this name for right now. To me, this is just a bear market squeeze higher until proven otherwise. I want to see a higher low put in (ideally  above the 23.93 gap) before getting interested to the long side. Wait and see mode for me, the bleeding stopped for now, but now lets take the temperature and wait for some additional signs of commitment.



$AMZN great gap higher this week for amazon and a push to the top of this larger range around 272. Honestly I do not love trading amazon around these levels, there’s just so much chop and volume put in here that I find makes it difficult to catch clean fast trades. Personally I always have more success with amazon when trading less size, trusting in bigger levels and not attempting to time the hell out of it. Bottom line, lots of chop, sitting at some pretty heavy resistance on higher timeframes, just a watch for me.



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Evan Medeiros

Evan is the founder of the Trade Risk. With 25 years of coding experience and a B.S. in computer science, Evan brings a systematic discipline to investing in the stock market.

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