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This evening, I was trying to think of a good topic for a post, since I don't have any general market commentary beyond what I stated in last night's video. I therefore fired up my portfolio and picked the best-performing shorts (that is, worst performing stocks) in my positions for Thursday so I could share a few thoughts on them.
We start with Abercrombie & Fitch, which I've traded many times. This one is most vulnerable to being stopped out, but it also has excellent potential. My stop-loss level is represent by that horizontal line, but what I'm hoping for is a failure of that supporting trendline. That would be a pretty dramatic reversal of fortune, so I don't put very high odds on it, but if it happens, this stock is in extremely serious trouble.
As huge as Google is, not only do I never trade them, I don't even bother following them on my 1,000-stock watch list. It's just a really uninteresting stock to my eyes.
For options traders, I imagine, it's an incredible stock, particularly since this thing always seems to have huge post-earnings gaps. I don't have any particular commentary or strategy to offer, but perhaps some of you do. I've drawn in the gap for tomorrow indicated by the current bid/ask price.
Let's notice the relative weakness of the S&P 500 Depository Receipts (SPY) in relation to the PowerShares QQQ Trust (QQQ), exhibited by the juxtapostions of their trading moving averages.
The QQQ has found support at its fastest, upper-most moving average, while the SPY has violated its most "bullish" moving averages, and has spent the last few hours probing its middle postion moving average. The fact that big technology names such as Apple (AAPL), Amazon (AMZN), Intel (INTC), Cisco (CSCO), NetFlix (NFLX) and others are positive today in contrast to the banks and the industrials, which are heavy, accounts for difference.
Well.. I have one of those Seasonal colds. So I have been a little cautious in my trades. Going over the charts this afternoon the question comes up 'Which way now?' Good question because it seems that we are an an important juncture.
Not looking to build a post that can be seen from outerspace… so let's look at the charts.
Ok.. this chart shows a 'Wedge','Upsloped Channels' and for me the Andrews forks. What makes this intesting is that the price bar is now higher than the Andrews channel. Just one bar… well… it's how it begins.
Below is a chart of the $NASI from Stockcharts.com Breadth seems to give the impression that we are now in the "BUY" mode… perhaps. My take is that we wiggle about a bit here… looking very toppy but not breaking down… then …. moving up.
Right now I will be using this sort of chart for my QQQ trades in the 5 min time frame.
To aid in longer inter day time frame analysis… I will include a QQQ 60 min chart. So in ending when I see that Break down… I will be trading in that direction. If it breaks higher then we trade long.