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Gary Kaminsky does a reasonably good job on CNBC … it helps that he was a money manager in a previous life (as I was). I mention him as he quite frequently mentions how the bond market is signalling one thing (economic weakness) and the stock market signalling the opposite.
Let's take a closer look at the relationship between the 10 Yr Treasury yields and the S&P 500:
Daily Chart:
I have had Petrobras on my radar for a while and it was looking more and more interesting the past couple of weeks. I know PBR's warts include that it was previously a hedge-fund darling, it has the Brazilian Gov't as its defacto CEO and that it is doing some major league elephant hunting in deep water oil plays (billions of $ to drill).
All that said, I need to take the charts at their face value and to me they are telling me to start a swing trade. I did so this morning at yesterday's HOD $34.56. I'm going to keep it small so I can keep it at the front of my brain and add to this trade when it shows me that it is working (i.e., takes out important levels).
Weekly Chart:
Weekly charts are always important to review for swing trade candidates … PBR shows a major trend line providing resistance from the 2008 highs where it was at its zenith as a hedge fund darling.
The first test will be to see if PBR can get back up to that level of $36.00ish over the next couple of weeks. Notice the last time it tested the line back in early 2011 … breaks are often retested. In that case the break failed and then it performed as it should, it went to the opposite side of the price pattern. The positive thing from that move is that it didn't seem like it wanted to break-out lower. When this happens, the subsequent test of the upper trend line can often occur WITHOUT a retest of the new break level (just keep your mind open to a clean break).
Daily Chart:
The daily chart is telling me that traders should start a swing trade position NOW … we have a nice possible reversal pattern taking place:
Price is nearing the next significant swing high level of $35.08 … getting above this level and "accepting" it will trigger me to add to my swing trade.
15-Minute Chart:
The 15-minute chart shows more clearly the "kick-off" thrust that PBR had when it moved/reversed off its lows. A nice consolidation pattern (rectangle) confirmed the direction of the move when it broke through the high
All-in-all PBR has all the things I like to see in a potential swing trade …. obviously all trades can have heat and/or fail, but to me this has good potential. Cheers … Leaf_West
Hi Slopers … as many of you know my blog site is in many ways more an educational site that attempts to help less experienced traders/investors to learn how become better "fisherman" rather than a spot that just talks about the latest stock tip.
To that extent I often receive requests from readers asking about an issue that people are having trouble with. That happened a fair bit after the market on Friday and on Saturday morning. The issues that people were having trouble with is how to get involved with stocks to the long side on an Up Trend Day. I have posted pretty extensive Trend Day trading guides in the past but I haven't done one in awhile so I wrote a post on Saturday afternoon.
The post looks at the trading in WYNN from reviewing the set-up on Thursday evening to the intra-day opportunities from Friday … what I really wanted to highlight for readers was how traders can still get involved on a good risk/reward basis with a strong trending stock even if you weren't there from the market open.
Anyways, I am giving this preamble so that people NOT interested in looking at intra-day trading in Up Trend Days, can avoid trying to read the attached long blog posting.
I hope everyone has a great 4th of July!!
Best 3-day move in a while … this type of thrust tells me that we are in a Wave 3 move. Next to come is a 4th wave pull-back and then a final wave 5 push to most likely new highs for this move.
I believe that we are at or near the end of wave 3 … what makes me think that is the slightly different pull-back that we experienced yesterday afternoon. The pull-back was the strongest we have seen since the move started Monday morning. A wave 4 pull-back should go at least to the 25% retracement area and most likely the 38.2% / 50% areas.
I will be looking to be flat in my trading accounts this morning after pruning some smallish overnight positions. If the set-up is good I will try and short the wave 4 move, but if not I will be patient and wait for the end of wave 4, to play the final wave 5 push. Don't kid yourselves, the easiest most profitable part of this move is over (wave 3).
Cheers … Leaf_West
Are you into Swinging?? If so, I have what you are looking for …
