Game Plan for Friday

Market Notes:

 

The market drifted up today on decent (but not great) volume, and is nearing the $85 resistance level.  Stochastics are very overbought right now, which leads me to believe a pullback is in order.  From a trading standpoint, I hope there is a pullback.  Entry will be easier once overbought conditions are worked off a bit. 

 

I may consider a short trade if we bounce towards $85 on average volume.  This would be a quick “against the short term trend” trade with a tight stop probably around $87. 

 

 

Increasing the odds of a pullback soon is the fact that the T2108 indicator, which measures the number of stocks above the 40 day moving average, is reaching overbought territory at 75.  I like to see the indicator hit 80+, which should happen if we get another day or two of bounce.

Trade Tracker:

I am still holding SSO and FAS.  I thought about unloading half of my SSO position today, but decided against it since my target has not yet been hit.  I am concerned that FAS has not kept pace, but ill still honor my stop.

 

 

Game Plan:

 

I continue to wait for a pullback for entries.  I also may think about shorting if we get more bounce on average volume.  Any shorts will be quick trades.

 

Focus List:

I continue to wait for pullbacks in focus list stocks.  There were a few good breakouts today (solar stocks like FSLR were on fire), which I’ll post over the weekend.  There’s no need to post then since it will take a multi-day pullback for entry.

See focus list stocks in Monday report:  http://docs.google.com/Doc?docid=d5z8q8w_842c2357xhj&hl=en

All focus list stocks are over-extended.

If I decide to short strength for a quick trade, I’ll use one of the following inverse ETFs: SDS, QID, FAZ or SRS.