Trading Notes for Today – May 2nd

Today will be an important day in response to the selling on Wednesday. How significant was the downside? This type of activity at this stage of the move offers two outcomes… first, forgets why it was selling and resumes the previous buying activity to push higher. Two, it is the start of a bigger decline. For that reason, we have to protect our downside risk and choose wisely on any upside opportunities.

Watch the trendline off the November low. It is starting to show it’s age as we go forward. The moves up and down are becoming more aggressive. This is not the beginning of the trend it is approaching the latter stages as you can now see clearly in the charts.

Trading Notes for Today:

  1. Gold is up in the pre-market. Looking to hold the 10 DMA. If it breaks I am interest in the short trade with GLL. If it holds there will have to be some momentum or a catalyst to the upside. Watch the ECB on rate cuts, could offer the stimulus.
  2. Oil is up slightly in the pre-market, but the downside pressure is in play. DTO 44.75 test and go would be of interest for a short term trade. Volatility in the sector has picked up significantly over the last three weeks.
  3. Small cap stocks fell 2.4% on Wednesday? That was just plain ugly! The sector is an indicator for economy as they feel the good and bad time faster and more realistically than the bigger companies with cushion and big budgets to cut and maintain their bottom lines. This is another negative for the growth outlook. Short play? $89.25 is support for IWM… interesting¬†dilemma¬†on the trade. Watch today.
  4. NASDAQ 100 held up better than the rest Wednesday and tested back towards the $70 support. Watching the test and a resulting play up or down on the move as a trading opportunity.
  5. SOXX test of support at $59.25? Watching to see how this plays out. Tech is enjoying the momentum currently and the upside is the direction I am looking. Test support and move higher? That is the outlook for now. Trade off a successful test of support.
  6. China economic data disappointed again. The downside still looks good with FXP entry at $20.
  7. Pattern Set Ups to watch today: 1)  GOOG Рtest of the break above $812  2) AMZN Рbroke support at $252.50? short  3)  DDD Рtested the break higher $35.50? more upside.  4)  FOSL РDouble bottom breakout  5)  RAX РBottom test and move higher? hold above $48.40.

It is a time to be cautious as this trend unfolds. Plenty of data to digest again today as we head towards the infamous jobs report on Friday. One day at a time.