Thursday Plan and Trade Report

Market Notes:

As price consolidates, the volume pattern is getting more and more ominous. Today’s volume has turned me from neutral to slightly bearish on the market. I am more inclined to take on short positions on the focus list.

Those looking to take a low risk setup long on the SPY got the chance that was talked about last night, as price dipped below $105. If entered at $105 with at stop at $103.50 and target at $108, that’s a 2:1 reward to risk ratio. I did not take the trade, but it was there for those who don’t mind taking a small loss with the opportunity of 2:1 risk ratio.

Trade Tracker:

I am still holding AMZN, BIDU and STEC short, along with bearish positions SKF and SRS. I am holding APOL long.

Setups:

Watchlist stocks from yesterday are still being watched: FSLR, IEX and gold stocks. Bearish stock STEC.

BIDU, a stock I am currently short and have already taken partial profits on, still looks vulnerable. Notice that, while volume hasn’t reached upmove levels, it has steadily increased on the pullback. A pullback to price and moving average support would not surprise me. Stop levels are tricky, but since the target is at $360, even a stop near $410 would give 1.5:1 risk.

Bird flu play SVA has been a tough entry post breakout, but gives us a decent support level now for which to place a stop. Entry here at $8.20, with a stop at $7.20 and target at pivot high of $11-12 gives a nice 3:1 risk ratio.

This setup is problematic because the bottom of the breakout bar is $7 and moving average is $6.76. If the stop is loosened to $6.50, the risk ratio would be closer to 2:1. Not as good but gives more latitude to stay in the trade.