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Every trading day, the ShadowTrader Focus List provides you with detailed trading ideas that have defined entries, defined stops and defined targets. Each issue contains 2-5 plays daily with full chart annotation explaining the rationale behind the setup. Stocks that are in focus may contain new breakouts to 52 week highs or lows, trendline pivots, pullbacks to moving averages, strong consolidations that are "building up steam" for a future move, or other technical events that foreshadow impending price action.
Additionally, each issue of the ShadowTrader Focus List always includes "The Big Picture" which gives a heads up on key technical levels in the broad market and a short term bias outlook. ShadowTrader feels strongly that the highest probability of a trade moving in the desired direction happens when the entry is correlated with pivots in the broader market which provide added momentum.
Good Morning, Traders. A "reinterpretation" of recent Bernanke comments put an already shaky market on Monday into a late day tailspin causing the Dow to close off 23.85, the S&P to shed 5.42, and the Nasdaq Composite to lose 17.78. Breadth closed negative as did advance decline lines. Although the late day knee-jerk selling was severe, no major trendlines or pivots in the three aforementioned major averages were violated. There was, however, one technical event which warrants some commentary and that is the trendline support area in the weekly Nasdaq 100 as shown above. In recent weeks in this column and in recent editions of the ShadowTrader Video Weekly, we have been discussing overall relative weakness in the Nasdaq Composite and Nasdaq 100 when compared to the S&P and Dow. Some traders and technicians feel that the 100 issues in the Nasdaq 100 should be "leaders" and tend to preface price action in the whole Nasdaq Composite. We tend to agree. If what are supposed to be the "biggest and baddest" of the Nasdaq start to breakdown, how much confidence will there be in all the other four-letter symbols? As you can see in the snapshot above, we have now sold off to trendline support in the $NDX. This is a serious make or break situation for this key index. If we have any confirmed close below approximately 1676, then the uptrend in the Nasdaq will be broken and could easily start to rollover to about the 1630 area which would be its next support at swing lows and also 50 period weekly moving average (red line, above). More importantly, if the $NDX does roll over here, the odds are strong that the Nasdaq Composite will follow and again it will just make it that much harder for the S&P and Dow to advance. Stay selective and nimble. Near-term bias is sideways to down, while overall bias remains upward. In light of the knee jerk selling late yesterday which makes the near-term outlook very ambiguous, we are not listing any new swing/position plays, but rather will re-list two setups from Monday which did not trigger but are still in shape technically to get into play. Trigger, stop, and target parameters are same.
Be sure to check for earnings announcements before entering new positions over the next few weeks
For questions or comments regarding the ShadowTrader Focus List, email to focuslist@shadowtrader.net
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SNUS - Sonus Pharmaceuticals
Industry - Pharmaceutical (Diagnostics)
Side - Long
Trigger - 5.75
Stop - 5.13
Target - 6.92+
Timeframe - multiweek
Notes
- Relatively "clean" chart, straight stair stepping motion of rise then orderly pullbacks
- Target listed is to prior swing highs
- Weekly hammer at trendline and rising 20ma (green) support
- Target is to next swing high on monthlies (not shown)
- Listed in Focus List yesterday but did not trigger
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CETV - Central European Media
Industry - Media (Television Broadcasting)
Side - Long
Trigger - 65.38
Stop - 63.66 / 62.35
Target - 73.00+
Timeframe - multiweek
Notes
- Pullback resulting in contraction of volatility
- Small bodied weekly candles often precede groups of larger bodies
- Rising 20ma weekly (green)
- Stop can either be just underr last weeks doji or looser at under weekly 20ma
- Listed in Focus List yesterday but did not trigger
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