Happy Father’s Day StockBandits!
As a dad of 2 little boys, I am learning just how much effort is required to be a good dad! To those of you who are more experienced than me, I want you to know you are appreciated….enjoy your day!
Now to the market…
Stocks climbed the proverbial wall of worry last week as another Greek parliamentary election scheduled for Sunday captivated the attention of traders. Rather than sell off on European-related concerns, they lifted with the help of reports that perhaps the Fed will provide more aid in the near term – something which has helped the markets on each occasion, at least for a while.
With the Greek election being such a focal point heading into this weekend, it could quite easily produce a big gap on Monday, depending upon what happens and how it’s interpreted. From there, we could see the gap serve as a breakaway gap to usher in some momentum one direction or the other, or we could see it get faded and quickly erased. We also have the FOMC this week with a 2-day meeting which concludes Wednesday, so that’s likely to also be a market mover.
It’s important to keep in mind here that we have no edge with all these outside events. All we can do as traders is to stick with the charts, exercise some added restraint with these scheduled events, and be willing to go with the flow once the market makes up its mind on what to do with it all.
From a technical standpoint, we’re getting some mixed signals from the indexes. Both the DJIA and S&P 500 have made higher recovery highs by exceeding previous bounces, while the NAZ and RUT each remain beneath former bounce highs (now serving as resistance). With that being the case, it’s difficult to embrace a full-fledged turn higher here, although that may change soon. My style is to always let the charts dictate my directional bias, and at the moment we still have differing opinions between the blue chips and the more speculative over-the-counter names. As long as that’s the case, it’s wise to maintain some caution until a directional shift is unanimous.
I’m seeing a lot more bullish charts shaping up this weekend, but given all the cross-winds the market will contend with in terms of news and headlines and gap risk as we head into Monday, I’m going to stick with my existing swing exposure.
I’ll run through a few of the indexes here and then share some new plays I’m eyeing.
NAZ – The NAZ has more work to do before it can make a lasting shift of direction, namely by clearing 2887 on a closing basis.
SP500 – The S&P cleared an important level last week at 1335 and now needs to show follow through and see some participation from the NAZ & RUT.
RUT – The RUT is challenging 772 here and needs to close above this level in order to gain some upside momentum.
DJIA – The DJIA is working higher here with some other levels to contend with on the way up. This senior index needs the NAZ to participate in this rally if it is to stick.
Charts of Interest:
Below are some charts of interest, from market leaders to example charts:
GOOG is dealing with a major level here, as has been noted here on the site a few times in recent weeks.
AAPL is holding up well but may also be holding back the NAZ by not lifting through short-term resistance.
JPM is still bouncing but the next pullback will need to see buyers if this big-cap financial stock is to make a lasting change of direction.
Watch List & Short-term Setups:
Below are stocks which are starting to set up but which are not quite ready for multi-day plays. These may provide short-term moves if the levels highlighted below are crossed, but should remain on watch a bit longer for those with multi-day to multi-week timeframes.
CDE turned higher a couple of weeks ago and has held its ground nicely. It’s now poised for higher prices.
WHR has a chance at a decisive turn higher if this higher low is able to hold.
FSLR spiked higher last week then pulled back quietly. There’s still some squeeze potential here, so it belongs on the radar for momentum players.
HAIN has pulled back quietly from its recent high and now has a well-defined trend line which we can use going forward as a pivot for a turn back up. A bit more rest would not be a bad thing.
CINF is at resistance here with a chance to start a new leg up. Once the Monday gap risk is out of the way, this is one I’d like to have a shot at.
ALXN is at key resistance but may need to rest a bit more to digest the recent rally.
GMCR is breaking down here but may still have some potential on the short side for nimble traders.
New Swing Trades:
These are the stocks I’m setting up for new plays. I will wait for my trigger price before entering, and all stop and target levels are provided below. For those of you who are new here, please see the Swing Trading Strategy for more details on how I manage these trades.
No new swings tonight, will let the Greek dust settle before looking to add exposure.
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Trades Overview:
This list is a look at our current & potential swing trading positions. Stocks we are already in have “triggered”, while those we are considering for plays have not triggered. Click post title to view print-friendly link.
LNKD removed (pattern negated without triggering)
Open Position Notes:
HOT bounced late last week and was able to push just past my entry point. Volume was quiet however, and price did not make a very decisive move either. This one still has room to fluctuate before my stop is threatened, so I’m going to stick with it for now and see how it acts on Monday.
NEM struggled last week to make any upside progress, and now sits near the lower end of the channel. I’m leaving my stop as-is for tomorrow’s session, but if it cannot shape up soon I may look to make an adjustment. The near term trend is up, but the stock seems to be losing momentum here and that may warrant altering my stop.
Closed Positions:
No closed positions.
