Trading Notes for Today – April 25th

As I stated yesterday the day is about the major indexes again from my view. The NASDAQ 100 index has moved back near the previous high of 2860. Is there enough conviction from investors to carry the index higher? That question is why I am watching the major indexes. Large cap tech and biotech have been the leaders and they are looking tired. I am still looking at the downside test and we will see today how this plays out. After-hours Qualcomm disappointed on earnings guidance and was down 5.8%. Watch the overall impact to the index. Watch QQQ for a move back to $70 or a test of $67.30 on the downside. PSQ РEntry $23.90

Equally the S&P 500 index is in position to test the previous highs at 1597. Now comes the final test of the current recovery following a move lower, a bounce off support and a push back into the previous uptrend. Now comes the  potential move above this previous high (1297) or a retest of the low (1536) just established last week. Even if the test higher is the move, it still leaves a test of the downside in play unless the index breaks out to a new high and follows through on the upside. Watch, be patient and play what you see.

Sector Moves of Note:

  1. Semiconductor to hold move above $36 breakout. If we test back to $35.50 and bounce look for a possible trade on the upside short term. Entry $36.05 on test lower first. NO test, NO trade.
  2. Technology (XLK) moved back to the $30 entry point. Watch today for the trade. Give some room early as the earnings were mixed overnight. This could be a bumpy ride in the sector as market determines direction short term. XLK – Entry $30 S&P 500 Model.
  3. Crude oil traded higher following the entry on Wednesday. We need to adjust our stop on UCO to 26.80 or break even on the trade for now. Watch how this trades intraday and give some room for volatility.
  4. Short on S&P 500 index (SH). If the downside begins or we stall similar to Wednesday looking to build a position in the downside play. Start with a 2.5% or 5% allocation to portfolio. We will dollar-cost-average in if the downside doesn’t¬†materialize¬†short term. SH – Entry $30.55
  5. Commodities (DBC) on the move Wednesday? One day wonder or a new trend in the making? DBB, base metals (move above $17.20)? DBC, commodities (move above $26)? DBA, Agriculture (move above 25.70)? DBP, Precious Metals (move above $47.50)? Each offered some upside on Wednesday and now comes the follow through or upside opportunity short term. POSTED DBC to the Sector Rotation Model. Gold is trading higher in the pre-market watch the entry. If gaps higher pass or wait for test on the move.
  6. VIX index remained at 13.5 Wednesday as the markets were flat and no anxiety to drive the upside. Still watching VXX if the volatility steps up short term. Entry $19.52 as trade on volatility.
  7. Gold is set to open higher. Watch the GLD trade and manage your stops on the move. After the open raise your stop to break-even on the trade.
  8. Ford is in position to break higher from the current trading range at $13.50. I am not trading this, but it is set up for a trade to the previous high at $14.30.

Remember to plan your trades and trade your plan – don’t let the emotions of day distract you from the objective.