september poised to start with a bang

$SPY saw a breakdown late in the day on Monday  from the rising channel we formed the prior week and then follow through selling on tuesday via a nice gap and sink lower. For the rest of the week we slugged it out within a sideways trading range between 163.25 to 165.  There are now 2 unfilled open gaps to the downside that the bears have been able to protect the past 2 weeks. The stage is set, the levels have been established, now it seems we are just a few headlines away from a capitulatory dropkick lower or a bull we-wont-take-anymore squeeze higher. As I write this sunday night the futures are indicating a good sized gap higher into the top end of this range, but be aware we are over 24 hours away from the US market open given the labor day holiday on Monday.  Lets see if the futures can remain positive into Tuesday morning and if so we may be in store for an upside breakout above 165 and into the first of two gaps. If this is faded into Tuesday then watch 163.25 to the downside.

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$AAPL much like everything else this week Apple is developing inside of a range spanning from 486 to 496. Also similar to the markets Apple closed on the dead lows of the range. Last time it was down here on this past wednesday the 28th we saw a powerful squeeze higher which eventually led to the highs of this range at 496. It’s a very logical place for a bounce to occur but of course Apple is a slave to the market at this point given all of the headlines that could push this around whichever way the ‘big boys’ please. However for the first time I did step in and bought the close in Apple on Friday for my swing account with small size completely accepting the fact I could get run over come Tuesday on negative headlines. Levels are clear here, trade them accordingly and also keep in mind we have the company product announcement next Tuesday September 10th.

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$GOOG this 2013 market leader is struggling to put together 2 consecutive green days, in fact it has only happened ONCE since July 15th. Thats a pretty tough bull life if you’ve been sitting in this name recently. 846 to 860 are the levels here. Trade them accordingly , the bull calvary still has not arrived in this prior leader and your clue might come in the form of back to back green days. Bears continue to get paid here, but be aware this one settled in nicely at a level which would seem likely to offer a bounce.

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$NFLX some refreshing action in this market leader, netflix too is trapped within a range however it closed the week in the upper 30% of it’s respective 275 – 290 range. Dips continue to be bought here and rewarding bulls who are brave enough to purchase in these unsettling macro conditions. My target still remains the all time highs above 300 and I think if the market can catch its footing anytime soon Netflix will get there in short order.

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$FB another rangebound stock but similiar to netflix this recent leader closed near the highs of it’s respective range contrary to the market and many other stocks. Friday this stock tried to escape the previous short term highs at 41.80 with a gap higher however it couldn’t quite hang in there and hold the gap. It closed near the the lows rejecting back into the range so on the upside we will still have to watch the 41.80ish level before more upside.

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$AMZN when I think of amazon’s price action recently it reminds me of Google. Both previous leaders that just are not finding any love recently. Amazon trapped in a new range between 280 and 285 and that 285 level had been prior support for amazon for nearly two trading weeks. 275-280 level was previous all time highs for the stock and the upper end of a range that lasted for MOST of 2013, so needless to say this is a very important level for the bulls to hang onto for swing traders and overall amazon investors. Levels are clear, the turnaround story keeps “feeling” like a day away, but so far that day does not want to come.

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$TSLA there aint no stopping this choo choo train. The bulls are still having their fun in this name and every dip has been a great buying opportunity. We all know the rubber band is getting stretched here on both technical and fundamental levels but that is precisely why this monster continues to grow in price. This is precisely the case when you need to turn off the logic switch in your brain and just trade what you see and manage your downside risk instead of thinking “but this just can’t continue higher…” Price got tight here for most of the week and it looks like someone wanted a headstart into the weekend because late in the day we began seeing price breakout of that relatively tight  4 day channel. If the breakout holds into Tuesday then the 172 all time highs should come real quick and given the 4 days of pent up energy this name should slice and dice that level and continue its march towards 200.

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Evan Medeiros

Evan is the founder of the Trade Risk. With 20+ 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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