Technical Picture - Markets Mixed

A modestly weaker open was followed by a gap fill and two waves of profit taking. However, the bulls were able to recapture most of the losses into the close. The DOW and Nasdaq were able to notch fresh new recovery highs intraday, but the S&P failed to confirm. After hours, Nasdaq futures are weak following disappointing earnings from CSCO. If tech rolls tomorrow, the broader markets will follow. As noted last night, the markets are extended and a correction here would not be a big surprise.

Negative divergence in the number of stocks trading above the 50 MA vs. the SPX.

MA and V look like they will correct here.

Last week's bull flag BO in UA reached the full measured move today. The shooting star foreshadows some profit taking.

FNSR forming bull flag on daily, but this is a resistance area on the monthly chart.

Best trade of the day on break of ORH - Vertical move to resistance.

AGU earnings gap forms cup and handle for a fast move to $98.00.

JDSU was a missed ambush trade. Had planned to trade this one, but didn't want to chase on the gap up. CIEN, another planned trade turned into a scratch.

These are not recommendations to buy, sell, hold or sell short. Everyone needs to think for themselves when it comes to trading their own accounts. First, it is the only way to really learn, and secondly,you are the only one responsible for your trading decisions. Think of these charts as food for further analysis. Before making a trade, it is important to have a plan. Plan the trade and trade the plan. The plan includes setting a trigger level, a target area and a stop-loss level. It is also important to plan for three possible price movements: advance, decline or sideways. Have a plan for all three scenarios before making the trade. Consider possible holding times. And finally, look at overall market conditions and sector/industry performance.

Good Trading!

Technical Picture - Bulls Push Prices to Top of Channel

Read some interesting commentary from Arthur Hill. It goes like this - the SPY is up 3% since the beginning of February. The above chart highlights two types of price surges: 1. surges following corrections are identified by blue arrows where the 6 day ROC (rate of change) goes from negative to 3+; 2. surges from the bottom of the trading channel are identified by red arrows, where the ROC moves from neutral to 3+.

The second type of price surge led to a correction in early November. We see this same type of price/ROC pattern occurring right now. Are the bears up to it?

On a measured move basis, we can target S&P 1328-29 as depicted below.

Gapping up on earnings: WWWW +16.5%, ANDE +10.7%, BGC +5.7%, CBL +5.9%, PBI +5.3%, ATML +4.4%, TTWO +3.6%, DIS +3.4%.
Gapping down on earnings: MOTR -17%

Economic Calendar

Momentum Stocks In Play:

JDSU
CIEN $27.00
SWK - Daily - bull flag forming

These are not recommendations to buy, sell, hold or sell short. Everyone needs to think for themselves when it comes to trading their own accounts. First, it is the only way to really learn, and secondly,you are the only one responsible for your trading decisions. Think of these charts as food for further analysis. Before making a trade, it is important to have a plan. Plan the trade and trade the plan. The plan includes setting a trigger level, a target area and a stop-loss level. It is also important to plan for three possible price movements: advance, decline or sideways. Have a plan for all three scenarios before making the trade. Consider possible holding times. And finally, look at overall market conditions and sector/industry performance.

Good Trading!

Friday's Trades - UA, CIEN, JDSU

As noted in Thursday's post, UA had a well formed bullish flag pattern on the daily. Price broke out 30 minutes into the session and never looked back.

If you missed the initial BO, a second opportunity presented itself as price consolidated at $63.00 and coiled prior to the next leg up. I took a partial at weekly R1 and let the rest run, until I got a sell signal. That was a good opp. to short as UA was extremely extended.

On the daily, we see that UA has room to run for a full measured move, so keep it on the focus list.


CIEN was a volume momentum gap which I found through the momentum scan. Price retraced back to weekly R2 which held as support. I waited for confirmation. Price consolidated at the base of the the 50% Fib. retracement and set up out a low risk entry (NR7) . I targeted a move back to the early swing high.

JDSU was an earnings gap mentioned in Thursday's post. Wait for price to consolidate on or near the rising 5 period ema on the 15 minute chart or 20 ema on 5 minute.

Technical Picture - Minor Gains Ahead of Jobs Data

Both the S&P and DOW have made new recovery highs since last Friday's sell-off. However, the COMPQ and RUT have yet to confirm. If the markets rally on tomorrow's jobs data, that would be ideal for confirmation. Without confirmation, it's hard to get overly bullish at these lofty levels.

GLD set up a nice short squeeze today as prices formed a solid setup out of a wide base. Looking for a gap fill as depicted below.

Note the small handle that forms at the baseline before price squeezes higher.

USD - Oversold technical bounce on test of the weekly trendline.

AMZN - bearish flag

UA - bullish flag

NR7 (price/volume contraction ahead of expansion) daily focus list APOL, FNSR, HOG, VRX

Earnings Gaps - Gap down - CSTR, LVS, PWER Gap Up - JDSU

These are not recommendations to buy, sell, hold or sell short. Everyone needs to think for themselves when it comes to trading their own accounts. First, it is the only way to really learn, and secondly,you are the only one responsible for your trading decisions. Think of these charts as food for further analysis. Before making a trade, it is important to have a plan. Plan the trade and trade the plan. The plan includes setting a trigger level, a target area and a stop-loss level. It is also important to plan for three possible price movements: advance, decline or sideways. Have a plan for all three scenarios BEFORE making the trade. Consider possible holding times. And finally, look at overall market conditions and sector/industry performance.

Good Trading!

Momentum Day Trades - APKT, TUP, WFR, BRCM CCK

TUP - continuation from yesterday's big move.

APKT - Momo earnings gap

CCK - Failed bull flag BO.

WFR - Handle and extension

BRCM was a low risk short. I was looking for an extension to daily support at $42.00. Price formed a long handle at the base of weekly S2 and head faked lower. I covered the short and took it long into the close. Shorts were squeezed when price broke back above $43.00.

Scanning for Momentum Day Trades

Scanning for momentum stocks intraday can provide low risk trading opportunities in addition to the usual suspects from the focus lists.

The scan I use is very simple to create and provides a short list of momo names.

I look for stocks priced > $10.00, with average daily volume > 500,000 shares. Today's price is > than yesterday's high by 1.005. Today's volume is tracking 1.5 times average. RSI > 60.

Today's scan produced a longer list than yesterday given the market rally.

The stocks I focused on were MTW, TUP, and FMCN as depicted below.

MTW was a wide gap to new multi-month highs. On the 15 minute chart below, we can see that volume is tracking far above average, hence the momentum play. Wide gaps generally need time to consolidate the gap before moving higher. We wait for price and the rising 5 period EMA to come together. If the 5 ema holds as support, we can plan for price extension.

Confirm the setup on the 5 minute timeframe. MTW looks good as price hold above 20 ema.

Price/volume contraction (coiling) precedes expansion, so we plan an entry on a break of the base. Took a partial at the next $ level.

TUP, another big volume gapper, did not hold the 5 period EMA on the 15 minute timeframe, but it did form a narrow base just below first level support at the cusp of $52.00. Here again, we see price/volume contraction ahead of expansion.

FMCN found support from rising 5 period EMA on 15 minute timeframe. I was looking for price to expand and retest the ORH. It started out nicely, but suddenly retraced back to the entry point. The bounce off of support was weak. I bailed when it couldn't hold $27.00.

What are the Limitations of Online Payday Loans?

Everyone is skeptical of easy money. “Easy come, easy go,” as old saying goes. One might think that is the case with online payday loans.

But it doesn’t need to be. Online payday loans are where you can borrow money from a future paycheck. The lender needs to see you are employed, and that money needs to be paid back in one or several paycheck into the future. The faster you pay off an online payday loan, the lower your costs of borrowing.

Millions of working people are using online payday loans to get through occasional difficulties, which is often financial stress due to emergencies. They can be real problem solvers but they come with some restrictions, as follows:

• Online payday loans restricted by payscale, lender rules. You cannot just borrow any amount you choose. The lender will never loan you more money than you earn during a single pay period. And with most lenders, those loan amount limits fall somewhere between $300 and $1500.

• You must pay off your first loan before taking out a second one. If you were somehow able to pay off one loan with another, it would ultimately cost you too much. There are fees and interest charges on all such online payday loans. As a short-term solution, you need to pay them off in one or two paychecks for it to make economic sense.

• No credit rating restrictions. One non-restriction of online payday loans is how your credit history DOES NOT matter. It is a reason why so many people consider online payday loans to be an essential means for covering off on unplanned expenses.

To summarize, online payday loans are very available to anyone with a job and a checking account (where the cash is received, electronically and by the business day following your application). But they are to be treated as a modest-sized, short-term loan meant for emergencies only. Easy come, yes, but easier if you pay it off on a timely basis.