Trading Notes for Tuesday, June 11th

Below is our outline of what we are watching today and some pattern ideas. The Watch List and Play List have been updated as well. Review and exercise caution. If you have specific questions on any posts please forward them directly to me.

Sectors to Watch:

  1. The S&P 500 index remains at resistance near 1648. Monday was a low volume day for digesting the move from last week. If the move higher is to follow through it looks in need of a catalyst. 3470 the number of the NASDAQ and 15,300 for the Dow.
  2. Treasury bond yields move to 3.37% for the 30 year and 2.21% on the 10 year. Downside still in play and added TBF and TBT back to the models on Monday.
  3. Energy is responding to the price of crude continuing to rise. XLE tested support near the $80 level and is attempting to head higher short term. OIL is in position to break the downtrend line with a move above $22.50. The EGG Model trade in XOP added on Monday.
  4. NASDAQ 100 index made a move through $73.50 on the upside as a follow through. Sector Rotation Model added the position. Watch as it is setting up to test lower today at the open.
  5. S&P 500 added all the posts on Watch List Monday.  SVXY, XLF, XLE and XLK.
  6. Japan (EWJ) continues higher and ran to the $11.20 resistance on the upside. Watch for follow through on the upside and trade. The Bank of Japan disappointed traders with the no change decision and push stocks lower along with the yen against the dollar. This is a volatile ride as the media is on the story and creating anxiety. Watch the outcome and let it develop. Added EWJ to the ONLY ETF Watch List.
  7. The downside risk is still in play. The bounce off support is just that, a bounce. We are still looking for issues from the economic data and then earnings will be right around the corner again. We have to be patient and deal with the short term volatility as we go forward. Stops were adjusted on the models. Futures are shaping up to open negative. A trading range may develop short term as a result of the uncertainty in the markets. We will build our positions accordingly and manage the risk.
  8. Facebook – No positions currently. The sentiment towards the stock remains negative, but an attitude adjustment from the upgrade to a buy on Monday. Found some support at the $22.80 level and bounced back above the $24 level. Thus, the reversal we discussed is now in play short term. If you took on the risk of the 23 September puts, the party isn’t over yet. Plenty of resistance in the $24.75-25 range. (Facebook Page Updated)

Pattern Setups For Today:

  1. ITC – descending wedge, but play entry at $89.20. Small Cap Utility stock.
  2. AHL – cup reversal with entry at $37.30. Small Cap insurance stock.
  3. BONT – Pennant – break above $22 entry.
  4. Follow up on previous posts:
  5. ANAD – Trading range with break above the $2.11 entry point. Hit entry nice gain of 10% – raise stop.
  6. KOLD – Cleared $18.35, next level is $19.45 and could run from there. Nice follow through Monday.
  7. OIL – break of the downtrend line at $22.50. upside trade. Still watching.
  8. QLD – A,B,C,D pattern. $67.40 entry on the follow through from Thursday. SSO is set up on the same trade pattern with entry $78.55. Manage both trades.
  9. PCLN – Pennant upside break at $810. Nice bounce and follow through on the upside.
  10. LEDS – triangle/wedge breakout to the upside at $1.70. Nice 11% gain on the upside break Monday.
  11. PALL – Still in play on break above $73.85 resistance. $76.50 target. Still positive.
  12. PACB – Break above the top the trading range. $2.65 – still climbing slowly.
  13. CRAY – Cup breakout at $18.05, initial target $18.85 and then 20.20. Looking good.
  • NOTE: The pattern trades above are setups that I see for a potential swing trade or trade opportunities. Some will fail to follow through on the pattern, some will break and trade according to the pattern. The key is to use discipline in the trades. Entry, Exit and Target on all trades is vital. I am posting these as opportunities that I see when doing scans daily. You can use them as a teaching tool or you can trade them, either way please use discipline.

All investing comes with risk. Our job as investors is to manage the risk. Markets remain choppy and directionally challenged for now. Keep your focus and discipline in place.