ShadowTraderPro Swing Trader

The ShadowTraderPro Swing Trader is your every morning dose of market reality brought to you from the resident geniuses at ShadowTrader. 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.

Good morning, traders. All eyes are upon the list of economic data to be released today (please see the Heads Up section below) which will certainly influence price direction today.

This week, price of the broad market, has been compressing which has implications for future price movement. Please observe the daily chart of the S&P 500 Index (SPY) below.

Those who listen to Brad Augunas on the ShadowTrader Squawk Box are already familiar with the terminology of the Value Area. What we have done on the chart above is applied the TOS Study of the Volume Profile, applying it to five day periods. The blue lines on the chart represent recent areas where the most volume has traded during each 5 day period encompassed by the study.

Notice how this week's value area range(blue arrows) is smaller relative to previous weeks. Compression like this often takes place before a meaningful directional move by the market. The orange arrows indicate similar periods of price compression before larger moves by the SPY took place (green arrows).

Although periods of price compression can build over days to many weeks, it is important to understand that as of yesterday's close, the broad market has been compressing which provides us with the clue that another directional price move is imminent.

Click here to check out our latest video on Money Flow.

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.

The ShadowTrader Sector Trend Score matrix is a proprietary method of assigning values to twenty five sectors that are a representative cross-section of the market as a whole. The heat map in the trend score column defines the current strength or weakness of that sector using a proprietary weighting formula. Sectors bolded in green and red are the two sectors that experienced the largest absolute gain and loss in trend score over the prior day. We strongly urge subscribers to read the full explanation of the meaning and calculation of the trend scores in the Swing Trader User's Guide.

ShadowTrader Sectors Trend Scores remained relatively mixed yesterday. The potential for a 3-4 day move is the direction of the broad market resolution is still on the table.

Up and coming economic and corporate data that may move markets this week:

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 MyTrade posting.

Long Ideas

Short Ideas

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 posting to MyTrade or text message to your phone. 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 08/14/11 - 08/20/11
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
CLF	long	50	08/12	77.50	n/a	n/a	82.50	74.50	open	75.33	(2.17)	($109)	$3,875
	Bought 1/4 size as stock began to lift off lows

CLOSED POSITIONS - week of 08/14/11 - 08/20/11
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
RES	long	200	08/12	24.75	40772	23.8	27.50	23.80	closed	n/a	(0.95)	($190)	$4,950
	Stopped out
TOTALS:	50	open shares (open capital committed doesn't include closed trades)											$3,875