Wednesday, December 5th Recap
Today's action was very interesting to say the least. The SPYs started off the say getting slaughtered and ended up reversing strongly to the upside midday. The day finished as an outside doji day, solidifying our indecisiveness in the market. However, if we look at the daily chart of the SPX, we still are somewhat bullish. I still believe that if we hold the 1380 range this week, there is room to run to the upside. It's funny, though, how quickly the market expectations change. Needless to say the market is very challenging right now. Times like these we need to hone in our what our skills actually are, and perfect what we do best. Find your setups that are low risk and execute them well. If you don't know what you do best and are having trouble finding your setups, DO NOT OVER-TRADE. When the tape gets tough, many traders begin to gamble, rather than trade. It takes more patience, and in indecisive times the best traders rise to the top.
For me, the best way to find the best setups is watch the sector rotation. Today, for instance, the banks were kicked off by a Citigroup rally (somehow after they announced 11K jobs were being cut), then BAC following with a monstrous day that we've all been waiting for. Right here we need to focus on the XLF's and the relative strength within them. In the past, the Homebuilders have also led, but they ended the day down 2.5%, while the XLUs on the other hand were up 1.5%. Tomorrow I'll be looking for a dip to buy BAC, or even see if JPM wants to participate in this rally. GS is currently lagging, but you may want to keep an eye out just in case.
Additionally, there are a few other setups that we posted on our Twitter feed that MUST not go without noticing. My top picks for tomorrow are LNKD, MNST, NFLX, PCLN, COST and EBAY. There is NO reason to be trading stocks that don't have A+ setups, especially in this weak tape where there just isn't any commitment to moves. These stocks have proven to be leaders, and its clear that the money is headed that direction.
Some other notables are BIG, CMI, ANR, CAT, SI and AMZN.
Lastly, we saw an absolutely horrendous day today in AAPL - the worst day we've seen in 4 years. For now I am staying far away from this, but I think we may see a bounce at the 525-530 area. Who knows how far we'll bounce, or if it's the end, but I am still VERY cautious. This could get ugly, and quickly, so be very tight with your stops and be extremely tactical.
For me, the best way to find the best setups is watch the sector rotation. Today, for instance, the banks were kicked off by a Citigroup rally (somehow after they announced 11K jobs were being cut), then BAC following with a monstrous day that we've all been waiting for. Right here we need to focus on the XLF's and the relative strength within them. In the past, the Homebuilders have also led, but they ended the day down 2.5%, while the XLUs on the other hand were up 1.5%. Tomorrow I'll be looking for a dip to buy BAC, or even see if JPM wants to participate in this rally. GS is currently lagging, but you may want to keep an eye out just in case.
Additionally, there are a few other setups that we posted on our Twitter feed that MUST not go without noticing. My top picks for tomorrow are LNKD, MNST, NFLX, PCLN, COST and EBAY. There is NO reason to be trading stocks that don't have A+ setups, especially in this weak tape where there just isn't any commitment to moves. These stocks have proven to be leaders, and its clear that the money is headed that direction.
Some other notables are BIG, CMI, ANR, CAT, SI and AMZN.
Lastly, we saw an absolutely horrendous day today in AAPL - the worst day we've seen in 4 years. For now I am staying far away from this, but I think we may see a bounce at the 525-530 area. Who knows how far we'll bounce, or if it's the end, but I am still VERY cautious. This could get ugly, and quickly, so be very tight with your stops and be extremely tactical.