Trading Notes for Today – May 6th

New week ahead and not much in the way of data to get in the way of the new found optimism over jobs. Slow week for economic data and earnings have settled into a mundane flow of, more of the same. We have to put money to work from hitting stops last Wednesday, and be prudent not to take reasonable risk in doing so.

Sector opportunities for today:

  1. S&P 500 index broke above the previous high of 1598 and closed at 1615. Friday we gapped above the $160 entry on SPY with an open of $161.25. Still watching to see if there is an entry opportunity on pullback and test of the move higher. Updated S&P 500 Model – added sector entry points as well to model.
  2. NASDAQ 100 index acted similarly with a gap open to $71.97. A test of the move would provide a better entry to add to, or establish a position in the NASDAQ 100 index.
  3. China is still attempting to put in upside run. The trade set up technically is a break through resistance on momentum. Worth the trade on the move, but nothing more longer term.
  4. Gold has stalled at the $142 level on GLD. $1475 resistance in play and 1430 support will be the trade target on the downside if we don’t clear resistance. If we move through the $143.50 (GLD) level the upside play will be the call. Added to ONLY ETF Model
  5. Oil became the speculation play of the week pushing crude back above $95 per barrel. No clear reason to have attained this level, but we will look for the downside play as an opportunity.
  6. Pattern Set Ups to watch Friday: 1)  IGV – Break above resistance and down trendline. Test of $68.75 entry.  2) RAX – break above resistance $48.85, test in play for follow through 3)  NFLX – Continuation from the consolidation on the break higher.  4)  KORS – Double bottom breakout – follow through on move  5)

Not interested in chasing the market this week. Looking for reasonable risk/reward opportunities. Those are not overly plentiful and any “value” plays are lower for a reason. Take into account where we are, what is ahead and risk that each position has if the sentiment shifts. This is an extended trend that has not tested the downside to any reasonable degree. Be disciplined and take what the market gives.