Sunday, December 18, 2011

Read for the week of Dec 19-23

Last week the 200d MA proved to be too much resistance and we fell back into a melee of moving averages. The daily chart of the SPY is forming a triangle consolidation, which is very positive in my opinion. Price is consolidating, the daily ATR is decreasing, and volatility has also been decreasing. It seems to me that a breakout or breakdown of this triangle consolidation could lead to a possible trending environment! I don't want to get excited too early, so just watch that triangle! A great r/r trade can be taken at either of those trendlines. I'm looking ~120 this week to possibly get long for a test of the upper trendline.



On the 15 min chart, wait for a break of this descending channel or wedge for a move to the upside. Alternatively, one can play the trendline bounces. Notice that we're forming a mini-bear flag, so a breakdown of this (level ~121.40) would signal more downside for now.



Also, check out the sentiment chart on Laser Trader's blog; the similarity with the SPY chart is uncanny!
http://lasertrader.wordpress.com/2011/12/18/are-we-ready-to-return-to-the-highs-justin-mamis-sentiment-cycle-may-think-so/

cI found a lot of pretty good setups, which has been a warning sign for me lately, so just be careful out there. A lot of breakouts are failing, so I have been trying to buy in anticipation of a b/o, and if the b/o fails, then I get out around breakeven... Here's a few stocks I'm watching this week:

Long: BANR, FSII, KFN, SKH, LDK, RAS, MENT, SUNH, SNTA, OCZ, CTCT, AUDC, TRGT, GTIV, CX, AVID.

Short: ECPG, GMCR, CVGI, STI

Bounce: I'll be watching gold and gold miners for a possible relief bounce this week... check out NUGT a 3x ETF for Gold miners. Also watching these for potential bounces: MELA, ITMN, LRN, SGI, LPS.

2 comments:

  1. Hi, I saw a hit on my blog coming from your blog and thought I would have a look. I like your work and chart reads. I hope you were able to take advantage of the GLD and SLV patterns you pointed out last week.

    Good luck this week and thank you for linking to my Cycle post.

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    1. Hi Lasertrader! Omg, I'm a little retarded, I never check my comments section and didn't realize you had left a comment on here... anyway, sorry for the late reply, but wanted to say thanks for your comment! And nice job on your blog, I read it regularly!
      cheers!

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