ShadowTraderPro Swing Trader for February 17, 2010
The ShadowTraderPro Swing Trader is your every
morning dose of market reality brought to you from the resident geniuses
at ShadowTrader. Overseen by Chief Equity Strategist, Peter Reznicek, each
issue contains a full report on the prior day's action, including market
internals, technicals, and what sectors were hot and cold. Each issue also
includes the ShadowTraderPro Model Portfolio, which updates members on
what stock plays STPro is currently engaged in officially, as well as
provide a daily list of long and short setups for more self-directed
traders and investors.
To get the most out of your subscription,
please read our Swing Trader User's Guide
If you have any
questions or comments regarding commentary or plays in this newsletter,
please email to swingtrader@shadowtrader.net.
The Big Picture
Good morning, traders. The S&P 500 Index (SPY) surprised a lot of people yesterday by smashing through every significant line of resistance. The question many are asking now is will the move continue today? From a trader's perspective however, two more important questions he or she should have answered before the opening bell are "what will I do if the market goes higher today and what will I do if the market goes lower today?" Let's look at the chart below and review our plans for both events.
The resistance lines we have been referencing for the past two weeks on the SPY chart are now lines of support which will continue to be important price levels in the near term.
Given yesterday's price action, we are inclined to think that the market will continue higher today with the next level resistance coming into play around the 110.54 on the SPY. If the market opens strong this morning, our plan is to enter one or two of our best long set ups early. Once the SPY gets near the 110.54 level we would either tighten stops and/or reduce our exposure by trimming some or all of our position(s). If we are unable make an entry at acceptable price levels on the long side, we will simply wait for price to touch the 110.54 level. Depending on the strength of the market at that point, we might look to make a counter trend play for a point lower.
Our back up plan in case the market disappoints and does not follow through of yesterday's move higher is to do nothing and let other market participants hash it out. With the lines of support now beneath price, there is too much working against a move lower. In this case, a move lower could lead us to a more favorable long entry level so keeping our powder dry seems like the best move. We did list two shorts in today's Bulls and Bears section for more aggressive traders to consider, however it is not an endorsement to get short here.
Whether the market moves up or down today, our recommendation is to keep position size smaller until the SPY trades above the 110.54 or back below 108.12.
Under The Hood
When we say "under the
hood" we mean market internals, ie: what was really happening behind the
scenes. ShadowTraders who listen to our daily broadcast every day live on
the thinkorswim platform know that all closing figures on the major
averages should only be interpreted in the context of market internals.
Look for convergences and divergences in the breadth, a/d line, and trin
figures below to either confirm or cast doubt on what all those talking
heads on TV are telling you.
| Dow Jones Industrial Average | 10268.81 | | | +169.67 | | +1.68% |
|---|
| S&P 500 Index | 1094.87 | | | +FALSE | | +1.80% |
|---|
| Nasdaq Composite | 2214.19 | | | +30.66 | | +1.40% |
|---|
| Nasdaq 100 | 1802.06 | | | +22.95 | | +1.29% |
|---|
| Russell 2000 | 620.84 | | | +10.12 | | +1.66% |
|---|
| Spot Gold | 1118.10 | | | +18.60 | | +1.69% |
|---|
| Crude Oil | 77.13 | | | +3.13 | | +4.23% |
|---|
| NYSE Overall Volume | 1,080,547K | | | n/a | | -24.30% |
|---|
| Nasdaq Overall Volume | 2,021,138K | | | n/a | | -8.83% |
|---|
| NYSE Breadth | 9.82 : 1 | | | Positive | | |
|---|
| Nasdaq Breadth | 5.64 : 1 | | | Positive | | |
|---|
| NYSE Breadth Ratio | 90.76 | | |
|---|
| Nasdaq Breadth Ratio | 84.94 | | |
|---|
| NYSE Advancers/Decliners | 2020 | | |
|---|
| Nasdaq Advancers/Decliners | 1181 | | |
|---|
| NYSE Trin | 0.50 | | |
|---|
| Nasdaq Trin | 0.45 | | |
|---|
| $VIX | 22.25 | | | -0.48 | | |
|---|
| ES Pivot Points for Wednesday |
| R3 | 1112.84 |
|---|
| R2 | 1103.42 |
|---|
| R1 | 1098.34 |
|---|
| Pivot | 1088.92 |
|---|
| S1 | 1083.84 |
|---|
| S2 | 1074.42 |
|---|
| S3 | 1069.34 |
|---|
| Strongest Groups: | Banking | | | Gold | | Oil |
|---|
| Weakest Groups: | Healthcare | | | Pharmaceutical | | Insurance |
|---|
Heads Up
Up and coming economic
and corporate data that may move markets this week:
Today
- 02/17/2010
08:30 am EST - Housing Starts09:15 am EST - Industrial Production02:00 pm EST - FOMC Minutes02:00 pm EST - Treasury BudgetReporting earnings today: AAP, ADI, AEM, AUXL,CECO, CFL, CLF, CYH, DE, DTG, DVN, FRT, GENZ, HPQ, HTS, IMA, JACK, KGC, LHO, NHP, NTAP, NVDA, OC, OII, ORLY, PCLN, PFCB
Thursday - 02/18/2010 08:30 am EST - Producer Price Index08:30 am EST - Jobless Claims10:00 am EST - Leading Indicators10:00 am EST - Philadelphia Fed Survey10:30 am EST - EIA Natural Gas Report11:00 am EST - EIA Petroleum Status ReportReporting earnings today: ABB, ABX, AEE, AU, AXA, BUCY, DAI, DTV, ETP, FSLR, HME, HRL, IM, INTU, JCOM, LTM, NBL, NRG, NXY, OGE, OHI, PDCO, PDE, PEG, POOL, RS, SNH, TRA, VR, VTR, WCG, WMB, WMT, WOOF
Friday - 02/19/2010 08:30 am EST - Consumer Price IndexReporting earnings today: BAM, JCP, PCG, PNWBulls and Bears
This section is for
self-directed traders and investors who like to "do it themselves". Every
trading day, Bulls and Bears will list long and short equity setups with
defined entries and stops. Note: A listing in this section does NOT
necessarily mean that the stock will end up as a part of the
ShadowTraderPro Model Portfolio. Plays listed here change daily and are
not managed or tracked by ShadowTrader unless traded via e-mail alert.
Long Ideas
CRL
| 37.10 |
35.07 |
Breaking bull flag | |
RKT
| 39.05 |
37.10 |
Reversal bar at prior congestion | |
EPR
| 36.23 |
33.23 |
Looking to break descending channel | |
Short Ideas
OTEX
| 44.98 |
46.53 |
Bearish engulfing pattern, relative weakness | |
UA
| 25.75-25.88 |
26.88 |
Coming into descending trendline | |
ShadowTrader Model Portfolio
The matrix below shows
all current ShadowTrader Pro plays in the Model Portfolio. The Model
Portfolio contains only those plays that are sent out in real-time via
email. Bulls and Bears plays above are not actively managed or tracked.
Current open positions are on top, with positions that were closed in the
current calendar week on the bottom. Closed positions are moved out of the
matrix on Monday mornings and posted in our performance page here.
To get the most
out of your subscription and for detailed instructions on how to structure
your own portfolio, read our Swing Trader User's Guide
| OPEN POSITIONS - week of
02/15/10 - 02/19/10 |
| sym |
dir |
size |
date
entered |
entry
price |
date
closed |
exit
price |
target |
stop |
status |
mark
to
market |
p&l
points |
p&l
capital |
capital
commit |
| None | | | | | | | | | | | | | $0.00 |
| CLOSED POSITIONS week of
02/15/10 - 02/19/10 |
| NYX | short | 350 | 02/16 | 25.30 | 02/16 | 25.62 | 23.25 | 26.70 | closed | n/a | (0.32) | ($112) | $0.00 |
 |
| | TOTALS: |
0 | open shares (open capital committed doesn't include closed trades) |
$0.00 |
Click here for year to
date Model Portfolio Performance - 2010
Click here for Model Portfolio Performance - 2009
Click here for Model
Portfolio Performance - 2008
|
