Monday, December 3rd Recap
Well, today was not what I expected and it totally caught me off guard - to say the least. To start, the gap up was not what I was looking for/wanted. And the lack of commitment from the bulls was something that still makes me shake my head. However, as day traders, that is why we have to be prepared for all situations. For example, on the SPY chart we can see that on the gap up, there was really no commitment to even be trapped into, if you're bullish. One thing that we look for at Elite Trading is the "inside bars" that represent a level of "equilibrium" between the bears and the bulls. So, looking at the above chart, we can see that instantly (within the first 10 minutes) that there was no upside follow-through/commitment by the bulls. At this point in our day we should instantly start to position ourselves for bearish movement and look for upcoming support levels (if you don't have them already).
The daily candle on the SPYs was something to definitely take notice. This bearish "outside day" today should prepare us for the pullback that was due, but today's action was a little more than the bulls wanted to see. Going into the rest of the week I'd say to remain cautious if you're bullish. Remember we have had a HUGE move since 11/16, so a retracement is still constructive - as long as its controlled.
I'm going to start the week by looking at a few of the indexes to start to see if we can find any sort of relative strength or any indication of bullishness after today.
- The Utility Index held Friday's low, as it has proved to be a surprising leader these last 3 days. It must hold 34.75-34.90 to remain bullish. We are currently as resistance dating back to this summer.
- GLD and SLV both had inside days today, but their charts are a little tough to read as they closed at the lows. The SLV chart shows a sloppy 15-min chart, and I anticipate a dip to 32.30 into support.
- The Financials opened at resistance, tested higher, and fell into support to end the day. Overall, it is still holding Wednesday's move pretty well. However, I think holding the 21-day is imperative.
- The Homebuilder's, just like the Financials, are still holding support as well. I think that XHB should also hold the 21-day to stay bullish. If it fails, we may see a retest of the 11/20 lows.
- The Oil Index held in decently well as it is still holding the 8 and 21-day. The 200-day is going to serve as resistance for now, so watch the 39.25 level to the upside, and the 38-level to the downside.
Overall, today's market has changed a lot of people's minds on where the market has headed (including my own). Granted, one day does not single-handedly change the sentiment, but it is time to reposition your portfolio and stay on your toes. Keep an eye on the relative strength throughout the market. Coming in to this downtrend the XLF's and XHB's were the market leaders, so watch to see if they can still rally their respective groups. In addition, keep an eye on the market leaders as of late: FB, EBAY, PCLN, SBUX, etc.
Today a few of the leaders had some nasty reversals, including FB. In my opinion we do see the 26.50 area for FB, and we do see the 650 area for PCLN.
AAPL has been the definition of "dead money" as of late. My most important advice here is BE PATIENT. The 8-day should provide support in the near term, and will be a low-risk trade once we get there.
There definitely are some interesting setups out there, however. For one, NFLX fell into support today that we had drawn back from November. I have been begging for a sell-off to entice some buyers, but today's action was almost too bearish. Keep an eye to see if any bulls are still around.
MNST is also currently flagging for a potential breakout. Even though today was red, it didn't sell-off completely like most weak stocks did.
FSLR is also seemingly wanting higher, but has been very volatile as of late. 28 is the magic number for FSLR. I am currently long via weekly call options.
The daily candle on the SPYs was something to definitely take notice. This bearish "outside day" today should prepare us for the pullback that was due, but today's action was a little more than the bulls wanted to see. Going into the rest of the week I'd say to remain cautious if you're bullish. Remember we have had a HUGE move since 11/16, so a retracement is still constructive - as long as its controlled.
I'm going to start the week by looking at a few of the indexes to start to see if we can find any sort of relative strength or any indication of bullishness after today.
- The Utility Index held Friday's low, as it has proved to be a surprising leader these last 3 days. It must hold 34.75-34.90 to remain bullish. We are currently as resistance dating back to this summer.
- GLD and SLV both had inside days today, but their charts are a little tough to read as they closed at the lows. The SLV chart shows a sloppy 15-min chart, and I anticipate a dip to 32.30 into support.
- The Financials opened at resistance, tested higher, and fell into support to end the day. Overall, it is still holding Wednesday's move pretty well. However, I think holding the 21-day is imperative.
- The Homebuilder's, just like the Financials, are still holding support as well. I think that XHB should also hold the 21-day to stay bullish. If it fails, we may see a retest of the 11/20 lows.
- The Oil Index held in decently well as it is still holding the 8 and 21-day. The 200-day is going to serve as resistance for now, so watch the 39.25 level to the upside, and the 38-level to the downside.
Overall, today's market has changed a lot of people's minds on where the market has headed (including my own). Granted, one day does not single-handedly change the sentiment, but it is time to reposition your portfolio and stay on your toes. Keep an eye on the relative strength throughout the market. Coming in to this downtrend the XLF's and XHB's were the market leaders, so watch to see if they can still rally their respective groups. In addition, keep an eye on the market leaders as of late: FB, EBAY, PCLN, SBUX, etc.
Today a few of the leaders had some nasty reversals, including FB. In my opinion we do see the 26.50 area for FB, and we do see the 650 area for PCLN.
AAPL has been the definition of "dead money" as of late. My most important advice here is BE PATIENT. The 8-day should provide support in the near term, and will be a low-risk trade once we get there.
There definitely are some interesting setups out there, however. For one, NFLX fell into support today that we had drawn back from November. I have been begging for a sell-off to entice some buyers, but today's action was almost too bearish. Keep an eye to see if any bulls are still around.
MNST is also currently flagging for a potential breakout. Even though today was red, it didn't sell-off completely like most weak stocks did.
FSLR is also seemingly wanting higher, but has been very volatile as of late. 28 is the magic number for FSLR. I am currently long via weekly call options.