market top? or market rip ?

$SPY first things first lets keep in mind the SPY chart appears more bearish than it really is because of Friday’s ex-dividend skewing the price some 83 cents to the downside. If we objectively assess the price action this week we can pretty easily agree the bears DID choke per my post from last week, bears take the spotlight, now don’t choke. BUT, they’re not out of the game yet, we still have a two way market that remains relatively rangebound between 184 and 189 with a slight upward bias and long term trend support. I have also outlined the potential head and shoulders pattern that has developed on the 30 minute time frame where we would need to see a confirmed break below 184.50 to really get the bear ball rolling downhill. I don’t think it does much good to over analyze this market beyond what I have already laid out. We trade within a high level base, range bound market, that remains in breakout mode to the down or upside. Expect whipsaw action and head-fakes until we get a definitive close outside of this range. This past week the action stopped me out of my SPY puts for a small gain, and I remain relatively flat in my swing account at this time.


$AAPL not too much has changed in Apple from one week to the next. We continue to slog it out sideways in this 20 point range and a resolution has yet to be seen. I have two measured move targets drawn JUST for some reference of where we could trade to once volatility starts expanding. I have no position or opinion on the name, just patiently waiting for a more certain price to get involved. Try not to get churned up here or feed the weekly option writers.


$GOOG also continues to pullback and consolidate a bit here after the impressive multi month/year run to the upside. Sloppy but constructive price action within the context of the long term trend. I mentioned last week I would like to get involved to the long side swing when the opportunity presents itself so I will continue to wait patiently here.


$NFLX I wish I could say I capitalized on the continued weakness in Netflix after writing about the short opportunity in this name last week but it quickly fell off my radar when the broad market demonstrated its magnetic pull for higher prices. Netflix traded down 20 points from last Friday right into support we had identified last week and remains one of the more unhealthy names in high beta land. We might expect Netflix to try and pause a bit here around $400 nevertheless it continues to remain a good vehicle to ride on the short side.


$FB continues to hold this intermediate level of support right where it needs too. This $67 level is pretty important and it certainly does open up the possibility of a nice flush to the downside if this really cracks in the next coming weeks. I would love to get on board Facebook at cheaper prices for a long term hold so I am all for roasting this $67 level but at the same time I have no problem buying this higher on momentum if we stabilize here. Just another wait and watch right now.


$AMZN was showing signs of promise these past two weeks but we got a breakdown this week back below the key 365 level that I have been writing about for weeks now. Short term momentum finds it self to the downside in this name and it’s very possible to retest the February lows around 340 now that it has fallen back into this lower range. The bulls need a quick reclaim of 365 – 370 to stay interested here.


$TSLA this chart looks identical to last week. Amazingly we continue to glide right above this open gap without filling it. This is my favorite swing long candidate right now and I will be a buyer on momentum above 245 if we do hold these levels. Just like Facebook, I would be even more pleased to see this name get cheaper for long term positioning but I’ll take whatever the market gives 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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