Last Gasp For S&P 500?

Happy new year guys... just slowly getting back into first gear with regards to thinking about trading.  What looked like a decent rally going into the year-end saw most of the gains wiped out on the final trading session of the year.  Is this the last gasp for the equity markets given the huge rally we've had off the March 2009 bottom?  I've readjusted by trendlines for the S&P 500 to show a cleaner channel trading range, and while we have made a few new 52-week highs the past few weeks, they are but just a few points and never seem to persist for more than a trading week.  It's a scenario wherein quantity just doesn't outweigh the quality of new highs.  Volume is light and it is hard to make judgements until we see volume come back in the new year, but the reward:risk at these levels are not that attractive.  Support is at 1,075-1,084 with resistance at 1,130.  Well, I'll get back to hibernating for now, just wanted to get this quick (a bit late) update out.  I'll be ready for the new year with more analysis.

   

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Swing Trades For The Day - Countdown To New Year Edition

I promised myself yesterday would be my last "Swing Trades For The Day" post, but seeing a number of quality setups as I scan through my watchlist, I've decided to let you guys in on my swing trade candidates on the final day of the year.  A lot of the setups are 1-2-3-4's (GCI, BCSI, MO, CENX), quite apt for a New Year countdown.  To help out those who are not familiar with the 1-2-3-4 setup (something developed by Jeff Cooper in his "Hit and Run Trading" series of books), it has three basic requirements:

1) ADX of above 30 (indicating strong trend, whether positive or negative); 
2) three consecutive lower lows or a combination of two lower lows and one inside day for longs (higher highs for shorts); 
3) and buying above the high (or low for shorts) of Day 3.  

The setup is designed for high momentum issues whose initial breakouts traders may have missed, but it's still not too late to hop on the bus.  These trades are usually designed for a quick swing trade (intraday to 3 days max in my experience, 2 days on average), so while I may have set high potential targets in the charts below, feel free to take profits if this time window has been acheived.  Other setups like UNH and NVLS are low-risk buy on pullback trades.  From my experience, having oversold slow stochastic readings provide a good probability of a sizeable bounce off support levels.  I am also watching a boomer setup in JST and a flag pattern in VIT.  Enjoy the charts, and always remember your stops!  Once again, Happy New Year!

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Swing Trades Of The Day - New Year Trading Resolutions

The market indices are showing signs of stalling after its recent string of up days, and it is in overbought territory.  Better keep trading volumes light and shift our focus to the year ahead.  This will be the final "swing trades of the day" post, and I'll use these final two days of the year to reflect on how to improve my trading and how to bring you guys better content on this blog.  For today, I will leave you with three picks: ARST, HPJ (rehash from yesterday as the setup remains good), and HGSI.  You can find the charts below.  The limited number of picks the past few days can be attributed to: 1) smaller number of tradeable setups as the market gets extended; 2) I just revamped my watchlist to take into account new names that have outperformed, and took out others that have underperformed, and my watchlist has shrunk to 72 names from 100 names; and 3) I've tried to be choosier with my setups as I don't want to give back the gains I've made this month (check out latest model portfolio perfomance update).  I'm not too keen on being aggressively short (not even hedging my longs, just keeping exposure light) for so long as we are above 1,120 on the S&P 500.  Anyways, what is your New Year's trading resolution?  I'd be glad to hear from you.  Every trader has room to improve.  Happy New Year!

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Swing Trades Of The Day - CAH, HPJ

Fewer swing trading setups by the day coupled with a some high momentum issues failing to continue with their moves (BUCY, JASO, RAX) has me a bit cautious on the markets.  Low volume also casts some doubt.  But so long as the S&P 500 is above the 1,120 level, the bias should remain bullish.  I think it is just prudent to keep a flexible level of long exposure (not more than 3 positions and not more than 2/3 net long) just in case we get a short-term pullback.  Setups for the day include CAH and HPJ (charts below).  Good luck!

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