The Gap Dilemma $TEVA #stocks #trading #markets

OVERVIEW: We recently highlighted TEVA as a long candidate but initially passed on the trade as it gapped up over 7% this last Monday extending itself above the buy point of the technical pattern the stock had carved out over the last several months. We had been looking, and hoping for, a bit of a pullback this week before considering putting a position on, but after a tight range on Tuesday that saw the stock close near unchanged, the stock again gapped up on Wednesday after news came out that Warren Buffet has a new position in the stock and it has continued higher since. Although it is difficult to watch a trade you have been lining up take off without you, I have come to be able to shake this type of thing off a bit easier than I had been able to in the past. We, as human beings, can have a selective memory when it comes to things of this nature. We seem to forget the trades that we passed on that ultimately went in the opposite direction which would have netted a losing trade for our account and only remember the ones that advanced without us. Many trades will come across our screens that for some reason or another we will not take part in, but like they say, you can’t kiss all the women, unless your Bill Clinton, of course. So with that in mind, let’s see what happened with Teva Pharma and how we can deal with these gap situations in the future. Here is the current chart showing the gap out of the triangle pattern shortly after a bullish moving average crossover, as well as the second gap higher two days later.

 

As we pan out and look at the longer term chart below we can see the stock made nearly an 18 year low in the tail end of 2017. From there the stock began a fierce recovery that saw the stock price double in less than three months. Since then the stock had formed a constructive looking five month base and ascending triangle pattern. In early May the stock caught our attention again when the 50 day MA crossed back up over the 200 day moving average and price started to press up against the top of the triangle. Unfortunately, the stock gapped higher out of the pattern adding an element of risk to the trade that we weren’t counting on initially. Why? Because now we must decide whether to buy the gap, which will likely result in us having to widen our stop beyond where we normally would have with this pattern, or accept the higher risk of being taken out of the trade prematurely with a tighter stop that would likely be taken out on a normal pullback. A third choice was to pass on the trade, which we did, hoping for a near term pullback. As traders we will be faced with these type of situations from time to time. We certainly would not have been “wrong” to take the trade on the gap day provided the gap wasn’t extreme and trade still fit into our risk/reward profile, in our case we just simply opted to wait for a pullback, which we often like to do, and unfortunately that did not materialize. From here it is important for traders to keep this stock on their watch list as it may set up for another trade on a qualifying pullback, or future breakout pattern. Often traders can get so frustrated in missing out on a trade in a certain name they cast the stock aside and forget about it causing them to miss on a possible future opportunity, in this case the chart shows a pause is possible near $22.70, this price marks the high posted in January of 2018 which ultimately led to the five month correction in the stock, so perhaps this area presents an opportunity for the stock to set up again, we shall see. And always remember in regards to opportunities you think have passed you by, it is always better to be on the pier wishing you were on the boat, then to be on the boat wishing you were on the pier.

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Weekly Market Prep For 5/21 $SPY $QQQ $IWM $COMPQX #trading #markets #stocks #indices

MARKET GAUGE: Confirmed Uptrend

*Weekly Sector Watch highlights several industry groups that have experienced a measurable change in strength or weakness relative to other groups over the last 3-6 week period.

SECTORS EXHIBITING RECENT STRENGTH: Oil/Gas (US Exploration/Production), Oil/Gas (International Exploration), Oil/Gas (Refining/Marketing), Oil/Gas (Machinery/Equipment), Transportation (Air Freight), Transportation (Rail), Steel (Specialty Alloys), Metals (Proc./Fabrication), Retail (Specialty), Software (Medical).

SECTORS EXHIBITING RECENT WEAKNESS: Computer (Data Storage), Computer (Networking), Internet Content, Transportation (Airline), Finance (Specialty Services), Finance (Mortgage Related), Finance (Foreign Banks), Telecom (Wireless), Agricultural Operations, Utilities (Electric).

OVERVIEW: After posting solid gains last week the indices mainly treaded water this week with the exception being the small caps as they continued their leadership registering a third straight week of gains. Technology shares took a breather hurt by some late week weakness in some semiconductor names, while the energy sector continued to plow ahead with a weekly gain of over 2%. Basic Materials, Healthcare and Consumer Cyclicals also turned in solid performances for the week. While new highs in the small cap sector are good to see, larger cap names continue to lag which continues to be a slight concern for us. Additionally, we would like to see the Russell 2000 pull ahead further building on last weeks breakout. A failed breakout that returns the index back into its base could be a huge negative for the markets. As usual there are many issues overhanging the markets such as as rising interest rates, higher commodity prices, a higher US Dollar and the usual geopolitical issues. It’s impossible to forecast with any accuracy how these issues will effect the indices going forward, if you find someone who claims they can, run away fast, if we all knew with certainty there would be no market. So, rather than fretting about all the recent concerns that float around from day to day, we will do what we always do and monitor the indices for any clues to possible changes in character and let the action of the stocks in our portfolio be the ultimate barometer for our trading. With that, let’s get right to our charts of the four major indices we monitor here in preparation for next week.

SPY- After gains of over 2.5% last week, this ETF that we like to use to monitor the S&P 500 traded lower by 0.52% this week. After taking a big hit on Tuesday that sent the index back below the April highs that were mounted recently, it was able to rally back above that level on Wednesday before barely being able to hold onto that level at the close on Friday. Although Fridays selling was fairly muted, the index did technically pick up a distribution day making for a seventh day of institutional selling over the last 22 sessions. While five to seven distribution days over the course of the previous 20-25 trading days is normally a cause for concern, we always preach about keeping things in perspective. In this case we will consider that the May options expiration added to volume levels on Friday. Additionally, the loss for the index of 0.25% was just above the cutoff for a distribution day, and with the index holding above its 50 day moving average, we will keep from getting too negative about what saw from the S&P 500 in terms of distribution. While we have used the $271 level, as well as the 50 day EMA on the index is our most recent measure of progress, markets are never obligated to clearly hold or break support and resistance levels or provide traders with picture perfect trends. The real possibility of further choppiness that vacillates across all areas of support on our charts  is something we always must consider as traders.

NASDAQ- The Nasdaq Composite continues to work through a nearly four month basing pattern and was able to finish the week modestly above the most recent resistance level near 7320. On Monday the index ran higher and nearly covered the gap that was left in mid-March when the index headed south shortly after reaching all-time highs. This area, near 7460 will present the first obstacle should the index try and continue its recent advance. The Nasdaq has looked better than the S&P 500 from a technical perspective while sitting much closer to its all-time highs, but the index did pick up a distribution day on Friday marking the fourth in the last 22 sessions, however, the 4/19 day will come off the books mid-week next week. Semiconductor stocks, which in part aided the recent recovery in the index, came under pressure late in the week. Chip stocks have now become a large part of the economy and helped throw the market into a correction earlier in the year so it will be interesting to see if more weakness in this area puts lasting pressure on the index once again, or if some other sectors pick up the slack.

QQQ- The Nasdaq 100 is a mirror image of the Composite. The index was able to escape a distribution day on Friday and finished the week by holding above its prior resistance level near $167.00. She sits with five distribution days in the current count but will lose the 4/19 and 4/20 sessions by late next week due to time. Looking at the volume pane below we can see that participation on up days over the last two weeks while the index rallied has been lackluster so it would be a welcome sight to see the index fire off some nice gains in the coming days on increasing volume. Without some heavier participation to the upside the most recent rally attempt may not have any staying power.

 

IWM- The Russell 2000 remains the beacon of light for the markets. The index has now seen gains in 10 of the last 11 sessions which has pushed it into all-time high territory. The index seems healthy from a distribution aspect as it has not seen a day of net selling by institutions since 4/24 and sits with only two distribution days on the books. We feel at this point that it may be key for the small cap index to pull away and add to its recent breakout. A failure here that throws the index convincingly back into its base may have ripple effect across the other indices, however with the index up nearly 7% from its lows on May 1st, a retest of the breakout area near $160.00 may be in the cards.

Our May Freeview of the Weekly Market Prep is coming to an end soon. If you would like to continue to receive it, along with real-time stock and option trade alerts that we are making for our portfolios, weekly stock watch videos, educational articles and more from myself as well as Greg Krupinski of GK trading, you can get it all for one price of $69.00 per month with no long term commitment. Simply visit us at http://www.ttptrading.com Hope to see you there soon!

A Note From TTPtrading Partner Greg Krupinski of GK Trading

All,

It’s been about a half a year since I entered the trading service arena and I’m really enjoying it so far.  For one, I couldn’t ask for a better partner.  CJ Agresta (@TTPtrading on Twitter) is an outstanding trader and has a methodology that complements mine quite well.  Most importantly, he’s just as passionate about trading and passing on his knowledge to others as I am so that makes for a great partnership.

A lot of you that follow me on Twitter or StockTwits probably don’t even know about the service.  That’s OK.  Self promotion is not something that I enjoy or I pretend to be good at.  I do however like being able to help members learn from my mistakes (and trust me, I’ve made plenty and will probably make a few more) and give them more insight into how I trade to help them on their way in developing their own personal style.  This includes live trade alerts and detailed reviews of why I enter certain trades, what I’m looking for, and when to get out if a position moves against you.  I am making all trades in my own account and not just throwing out a bunch of suggestions.  Selfishly, having the service and alerting these trades adds an extra layer of accountability to my actions which benefits my trading as well.

It seems like the market is saturated with trading services.  Many seem to be great.  I think the right service can be a great tool in helping both new and seasoned traders by helping them in their development of their own style and of course save time by having the research and ideas provided for them.  We at TTP Trading are new to this.  Our membership is not large but we’ve received some good feedback from current members and that’s how we measure our success.  We feel that having access to both CJ and myself provides a great value to members and one we encourage them to take advantage of.  We love what we do and if you are interested please come check us out at TTP Trading.  It’s $69/month with no long term commitment required.  We’d love to have you.

I guess that’s my attempt at self promotion for the next few months!  In the meantime, I’ll continue to post my favorite setups on StockTwits and Twitter for everyone.  Thank you and take care!

Weekly Market Prep For 5/14 $SPY $QQQ $IWM $COMPQX #trading #markets #stocks #indices

MARKET GAUGE: Confirmed Uptrend

*Weekly Sector Watch highlights several industry groups that have experienced a measurable change in strength or weakness relative to other groups over the last 3-6 week period.

SECTORS EXHIBITING RECENT STRENGTH: Oil/Gas (Integrated), Oil/Gas (Refining/Marketing), Transportation (Ship), Transportation (Rail), Steel (Specialty Alloys), Metals (Proc./Fabrication), Retail (Specialty), Software (Medical)

SECTORS EXHIBITING RECENT WEAKNESS: Computer (Networking), Transportation (Airline), Finance (Specialty Services), Finance (Mortgage Related), Finance (Foreign Banks), Telecom (Wireless), Retail (Department Stores).

OVERVIEW: As you can see from our market gauge the indices have regained sufficient strength to lose their “under pressure” designation and resume the confirmed uptrend that was initiated on 4/10 with a follow through day that registered on the heels of the 4/4 initial rally attempt. The S&P 500 and Russell 2000 have posted six straight days of gains something they haven’t achieved since early February. Many more stocks have been breaking out of solid bases and others have had positive reactions to solid earnings reports which is a reversal of what we had been seeing when many traders were taking advantage of the good news to trim their positions in stocks. Another positive sign is a lack of new distribution days registered by the indices, in fact, we have to go back seven trading sessions to find the last day of net selling by institutions. While the markets have been able to rally and pull away from their 50 day moving averages, there are some hurdles ahead so let’s take a look at where we stand with the indices that we track hear heading into next week.

SPY- The S&P 500 has trailed tech stocks and small caps but has been trying to play catch up this week by registering six straight days of gains. Most importantly, the ETF we use to track the progress of the index, has finally been able to take out the most recent level in a series of lower highs and remount its 50 day moving average. Going forward the next line in the sand rest near the $280 level, or 2800 on the index itself, and this area may present a larger hurdle for the index. This is the area where heavy selling began with a series of gap downs in price back in late January and early February that put the market into correction territory and may provide heavy overhead resistance for the index, but let’s not get too far ahead of ourselves. At some point this recent advance will be met with a pullback and what the bulls need to see is the 50 day moving average line act as an area support for the index. Although we have not seen any recent distribution days the index still sits with six day in the current count but with time and any further rally we could see days drop off the count in a hurry. I will remind clients again that while we need to monitor the indices for changes in character, either positive or negative, rely on the action of leading stocks in the market and the action of the stocks in your portfolio, as this will be the true barometer for your trading.

 

NASDAQ- The Nasdaq Composite, which has been in better technical shape than the S&P 500 recently, has moved strongly above its 50 day moving average while also clearing the April high the was set after the rally confirmation on 4/10. The index looks much better from a distribution perspective as it is now left with only two days in the current count. The 4/24 distribution day (marked in pink in the volume pane) was removed due to a rally of 6 plus percent from the lows set on that day. This is one way distribution days can be removed from the current count with the other being simply time. Looking ahead, the index may meet its next key challenge, not at its old highs, but at big round number resistance at the 7500 level. Until then, we would like to see any  pullback contained at the 50 day moving average line.

 

QQQ- The Nasdaq 100, not surprisingly, is looking very much like the composite except that we see a couple more days of distribution in this picture. However like the composite, it too erases the distribution day from 4/24 based on the big rally that followed. Additionally, some of the older distribution days will start to come off the count late next week due to time. The next line of possible resistance lies below the old highs near $171.00. Index heavy weights Amazon and Netflix are close to breaking out to new highs and if they can breakout successfully the index may challenge its old highs near $175.00 soon.

 

IWM- The Russell 2000 continues to be the leader in the clubhouse and after six straight days of gains is less than 1% away from all-time high territory. The recent rally has run price right into those old highs so it will be interesting to see if the index needs a breather before mounting that resistance, or if this becomes a tough area for the index to overcome.

We hope you continue to enjoy our Weekly Market Prep May Freeview. Consider joining our premium site to continue to receive the Weekly Prep, real-time stock and option trading alerts, weekly watch lists and much more. Here you will have access to Greg Krupinski of GK Trading as well as myself for one price of only $69 per month. Check us out at http://www.ttptrading.com. See you there!

Weekly Market Prep For 5/7 $SPY $QQQ $IWM #trading #markets #stocks #indices

Weekly Market Prep For 5/7

MARKET GAUGE: Uptrend Under Pressure

SECTORS EXHIBITING RECENT STRENGTH: Oil/Gas (Exploration/Production), Oil/Gas (Field Services), Oil/Gas(Refining/Marketing), Oil/Gas (Integrated), Transportation (Ship), Real Estate (Development Ops), Retail (Restaurants), Retail (Specialty), Mining (Gold/Silver).

SECTORS EXHIBITING RECENT WEAKNESS: Computer (Networking), Software (Gaming), Medical (Biotech), Internet (Content), Financial (Mortgage Related), Financial Services (Specialty), Transportation (Trucking), Telecom (Wireless), Electronic (Semiconductor Equipment), Software (Education).

OVERVIEW: The indices finally showed some signs of strength late in the week. A bullish reversal day on Thursday followed by a strong trend day on Friday has traders hopeful that the markets may be finally finding some footing, however, some work still needs to be done before the pressure eases on the recent uptrend. We mentioned here on a few occasions that in tracking distribution days we must keep things in context and Thursdays action was a prime example of this. The S&P 500 sold off hard to start the day easily piecing through its 200 day moving average. The sell-off was then met with some convicted buying as volume swelled to its highest level for the SPY ETF in nearly a month and although the index finished down just over 0.2% on a increase trade from its previous session, which technically qualifies as a distribution day, institutions were actually stepping in at this level and were net buyers of stock not sellers. As is often the case in the markets, the devil is usually in the details so be careful to take your market information in full context before coming to a quick conclusion. Again, we are not out of the woods yet in regards to the market regaining it confirmed uptrend designation so lets take a look at the four indices we track here to see where we are to start the new week.

SPY- Fridays rally that built upon Thursdays bullish reversal was nice to see but the index is still faced with a series of lower highs which we highlighted last week. The week ending rally ran up to the 50 day EMA but was halted there again as it has been on several previous occasions recently. The first step for the index would be to close convincingly above the 50 day EMA, it then needs to post a higher high over the $271 level that was set back on 4/18 before we can get overly bullish. Until then it will pay to be very diligent in looking for new leadership in particular sectors as well as individual stocks so that when and if the market starts to roll again you are ready to take advantage. The ETF has six distribution days on record over the last 16 sessions so some caution is still warranted.

NASDAQ- While the S&P 500, and the DOW for that matter, have clearly been the weakest links in the chain, the Nasdaq Composite is holding up slightly better. A quick peek at the SPY chart above will show the ETF either touching or trading through its 200 day moving average line on several occasions while the Nasdaq has yet to visit the area. Additionally, Fridays rally put the index back above the 50 day moving average while the S&P fell just shy. Finally, the Nasdaq shows only three days of distribution recently compared to the six posted by the S&P 500. Similarly, we would also like to see the index take out its prior high posted on 4/18 before getting too excited about the upside.

QQQ- The Nasdaq 100 chart is pretty much a carbon copy of the Nasdaq Composite except that this index has been hit with a couple more  distribution days recently. The index was easily the clear winner this past week with an advance of 1.72% but heavily weighted Apple (AAPL) played a large part in the index performance with a gain of over 13% for the week, yet another example of context.

IWM- We have identified the weak link in the index chain now we visit what appears to be the strongest. The Russell 2000, like the Nasdaq Composite, was able to remount and close above its 50 day EMA on Friday and also shows only three distribution days in the current count. What is different here is that the index only sits 3% below the all-time highs set earlier in the year compared to 5.5% for the Nasdaq and just over 7% for the S&P 500. The small cap arena should be an area of focus for traders moving forward.

That’s all for now. See you later this weekend for the Weekend Portfolio Review. Have a great Saturday Evening!

We hoped you enjoyed this May Freeview of our Weekly Market Prep. To receive this overview every weekend along with real-time trade alerts and much more from myself as well as Greg Krupinski of GK Trading visit us at http://www.ttptrading.com to join our premium service.

 

Weekly Market Prep For 4/30 $SPY $QQQ $IWM $EAT $CAKE #trading #stocks #markets #indices #Nasdaq

MARKET GAUGE: Uptrend Under Pressure

*Weekly Sector Watch Highlights several industry groups that have experienced a measurable change in strength or weakness relative to other groups over the last 3-6 week period.

SECTORS EXHIBITING RECENT STRENGTH: Energy (Solar), Oil/Gas (Field Services), Oil/Gas (Exploration/Production), Oil/Gas (Drilling), Oil/Gas (Refining/Marketing), Transportation (Ship), Retail (Restaurants), Apparel (Manufacturing), Retail (Specialty), Beverages (Alcoholic), Metals (Mining/Ores).

SECTORS EXHIBITING RECENT WEAKNESS: Electronic (Semiconductor Equipment), Electronic (Semiconductor/Fabless), Electronic (Scientific Measuring), Electronic (Semiconductor/Manufacturing), Software (Gaming), Internet Content, Financial Services (Specialty), Financial Services (Mortgage Related).

OVERVIEW: We discussed last week just how delicate the recent confirmed uptrend was and this week past weeks trading bared that out as the markets were throttled back into uptrend under pressure mode. It has been a tough trading environment as of late, especially in regards to many of the trend trading set ups we like to trade. We had a prospective client email us recently and he mentioned that it has been somewhat boring at times in regards to his trading. To that I say, perhaps you are on the right track. As much as we may enjoy our trading and consider it a passion, if we are serious about making money and growing our accounts we have to realize that there will be periods of reduced activity as our trading style may not be offering up good opportunities every day, week, or month. The longer I trade the more I realize the importance of patience. The patience of waiting for a good set ups that are in line with my methodology and the patience to let the process of each trade play out. To borrow a line from another veteran trader I admire, “if you are looking for excitement have an affair, it will be a lot cheaper.” Your trading should be run like a business with your account equity acting as your inventory and should you run through that inventory, you will be out of business. Preservation of capital is paramount and yes, that can be boring. With that, let’s take a look at our four major indices which are struggling to remount their key 50 day moving averages.

SPY- The S&P 500 has not made any progress since February as it has traded in a sideways chop back and forth across its 50 day exponential moving average for three months now. In doing so the SPY ETF, which we use here to track the index, has printed a series of lower highs since the beginning of the year. The index has tried to remount its 50 day EMA on three occasions and has failed each time. It tried again late this past week to rally up through the key level but was stopped just short. If we look at the volume pane below we can see that each of the last three days that the index has rallied volume has decreased incrementally which shows a lack of conviction by the bulls. The indices need to remount their 50 day lines, take out their most recent lower high and do so with some conviction before we can get too excited from a bullish prospective. The ETF currently sits with four distribution days over the last 14 sessions and with our current uptrend already under pressure, any additional distribution days next week will set off serious caution flags.

NASDAQ- Unlike the S&P500 the Nasdaq Composite was able to post a higher high, which occurred back in March, but the general theme  has been the same here with the index caught in a trendless chop for most of 2018. Good news has been bad news as a slew of solid earnings reports have been aggressively sold into, this is at best the sign of an unsure market and at worst the sign of an unhealthy market. More big reports are slated for next week with Apple taking the limelight on Wednesday and we will be watching how those numbers are received by the market. The Nasdaq also tried to retake its 50 day line on Friday but the early rally failed with the index closing back below the line by the final bell. On a positive note the index did hold round number support at the 7,000 level on Wednesday and has only two distribution days on the books since the 4/10 follow through day.

QQQ- The Nasdaq 100 has virtually the same look as the Nasdaq Composite and Fridays activity supplied the same fate with the index failing to close above the key 50 day EMA. Upside volume for the index has been better recently relative to the S&P 500 however, the index also sports four distribution days over the last 14 sessions. With most FAANG stocks earnings out of the way the short term fate of the index may be provided by traders reactions to quarterly earnings by Tesla (TSLA) on Tuesday and Apple (AAPL) on Wednesday.

IWM- Of the four indices we cover here the Russell 2000 has been the relative winner as it sits only about 3.5% away from its all-time highs set in January and is the only index that currently sits above it 50 day EMA, albeit barely. Similar to the other indices, selling has been a bit more aggressive on the downside compared to up days for the index. The index did escaped a technical distribution day on Friday as the small decline of 0.14% did not qualify but we did take note of the pick up in volume when compared to Thursdays positive session. As it is, the index officially sits with three distribution days on the books since the markets confirmed a new uptrend on 4/10. Remember, that five to seven such days in the indices over 20-25 sessions warrants serious caution.

Now from our Sector Watch this week. We can see that the restaurant group has been showing some recent strength so let’s take a look at some stock here that have caught our attention.

EAT- Brinker International has advanced over 30% since late March. That’s a strong move in a short period of time putting this stock on our momentum watch list. Although the recent trend supports a possible trade on a qualifying pullback the stock has traded right up to an area of overhead supply from last spring which tempers the possible set up. The stock is set to release quarterly results on Monday so we will be standing aside and letting the price pattern continue to develop. A poor reaction to earnings may send the stock right back into its previous base which would squash the set up for us. A continued move higher however, would keep this stock on our momentum watch list and we would be watching for a pullback to possibly get involved here. Our first chart goes back nine months on a daily basis showing a great looking set up with no overhead supply, but as we pan back a few months further on the second chart, we can see that the stock is trading into some overhead supply. It is true that the further back the supply of stock is in any congestion area it may present less resistance, however some stocks can have long memories so it always pays to survey the charting landscape from several time perspectives before jumping in to a trade. Here is a look at the two separate time perspectives that offer up much different looks.

CAKE- Cheesecake Factory popped up on our list as a potential breakout set up in this group and it too looks solid. An early breakout in April checked up quickly and the stock has formed another brief four week consolidation offering traders who may have missed the initial move a second opportunity to get in. A move above $53.70 could signal a possible entry with a stop just below the $50 level. However, as we pan back a bit further we can see again, similar to EAT, a big area of over head supply that sits between $57.00 and $64.00 which may limit the possible upside to this trade, especially for intermediate term position traders. Now, if we take a third look with a weekly chart going back even a bit further into mid-2016, we notice a congestion area between $47.00 and $53.00 which the stock is butting up against right now. The lesson here is to know the time frames in which you are looking to trade and make sure each individual set up coincides with your methodology. For our purposes here we look to swing out half our trade for hopefully shorter term gains but since we look to retain the other half for longer term potential we ideally like to see set ups that do not have an area of overhead supply too close by. Here is a look at all three charting time frames.

Join our premium service to receive our real-time trading alerts, daily market briefings, charts, watch lists and more. You get access to both myself and trader Greg Krupinski from GK Trading for one low price of $69 per month. Check in at http://www.ttptrading.com. See you there!

TTP Trading Freeview: Weekly Market Prep for 4/23/18 $SPY $QQQ $IWM $COMPQX #trading #markets #stocks

MARKET GAUGE- Confirmed Uptrend

*Weekly Sector Watch highlights several industry groups that have had a measurable change in strength or weakness relative to other groups over the last 3-6 week period.

SECTORS EXHIBITING RECENT STRENGHT- Energy (Solar), Oil/Gas (Field Services), Oil/Gas (US Exploration/Production), Oil/Gas (Refining/Marketing), Oil/Gas (Drilling), Transportation (Ship), Software (Security), Medical (Products), Metals (Mining/Ores), Real Estate (Development).

SECTORS EXHIBITING RECENT WEAKNESS- Software (Gaming), Retail (Consumer Electronics), Semiconductor (Manufacturing), Semiconductor (Equipment/Materials), Semiconductor (Fabless), Computer (Networking), Leisure (Lodging).

OVERVIEW: An early week rally in the indices turned somewhat sour late in the week and the late week selling pushed three of the four major indices we track here back below their key 50 day moving averages. Although we are still in a confirmed uptrend, it won’t take too much more heavy selling pressure to put our Market Gauge in “Uptrend Under Pressure” mode, but we’ll take things one day at a time. In an interesting development this week the financial sector, which had been unable to gain any traction lately despite some stellar earnings and a rising interest rate environment, bucked the trend late in the week with some nice gains. While it was nice to see the group pick up some steam, I’m not sure at this point how much of a positive effect this will be for the markets. The rising interest rate environment, while a plus for the sector, has now pushed the 10 year treasury note within an eyelash of a four year high and it remains to be seen how the market will react should bond yields continue to rise. Here is a look at the 7-10 year Treasury Bond Fund ETF where the heavy selling on Thursday and Friday put pressure on stock prices. Remember, bond prices down, yields up.

Keep in mind, confirmed uptrends are not fool proof crystal balls into the future. They merely tell us that it is time to start putting money back to work on the long side and this should be done slowly and methodically until the indices carve out a longer term trend and start to make new highs, it is at his point you can get more aggressive. The prior confirmed uptrend that was signaled in early February ultimately failed in late March. So, we will continue to monitor the indices here to help guide our trading, but remember that the action of your individual stocks is your ultimate barometer. With that, let’s take our weekly look at the indices.

SPY- The poor finish to the week put the ETF back below the 50 day EMA chalking up two fresh distribution days in the process bringing our total up to three since the 4/10 follow thru day. Note that the index itself currently posts only one distribution day, but for our purposes we prefer to track the ETF. While we note the distribution, we have to try and assess the intensity of the selling as well. While Thursday and Friday volumes increased, trading was still below the 90 day average and Friday volume in particular was aided by monthly options expiration so we do take this into consideration and try to keep things in context. We would like to see the index reclaim the 50 day EMA next week but action could be a bit volatile. With earnings season in full gear and many big names reporting next week, earnings results may drive shorter term price action.

NASDAQ- The Nasdaq Composite also suffered the late week blues due in large part to heavy selling in semiconductor group. Heavily weighted Apple Inc. (AAPL) added to the pressure as the stock lost over 5% for the week. Semiconductor stocks have become a large part of the economy of the last many years, so this recent weakness is something to take note of. On the positive side, the index did escape a distribution day on Friday as volume receded from Thursdays level. This leaves the index with only one such day since the 4/10 follow thru day so the index is looking good from this prospective.

QQQ- The Nasdaq 100 suffered the most damage on Friday losing 1.58% and closing back below its 50 day EMA. Volume was heavy here relative to the other indices coming in just above the 90 day average but again we must account for the monthly options expiration. The index did chalk up a distribution day again on Friday bringing the total to three over the last 20-25 day period. Remember, occasional distribution days are normal but 5-7 days over 4-5 week period will definitely put us on caution. Some big earnings are on deck this week from the likes of Facebook (FB), Amazon,(AMZN), and Alphabet (GOOG) so expect some fireworks.

IWM- The Russell 2000 continues to lead the pack of the four indices we cover here. It was the only index to maintain and close above its 50 day EMA this week and added just over 1% in the process. Traders should take note of the relative outperformance and focus on these small cap names should the market stay in confirmed uptrend mode. The index did pick up a distribution day on Friday which is only the second since the 4/10 follow thru day in the markets. The index by far rests much closer to all-time high territory compared to its counterparts sitting just over 3% below the mid January high of $160.63.

That’s all for today. See you later this weekend for our weekly review of our open trades. Have a great Saturday!

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$SQQQ $DXD $SPY $IWM #trading #markets #stocks

Here is an excerpt from last weekends “Weekly Market Prep” that is sent to our premium subscribers. SPY- While the Nasdaq, Nasdaq 100 and Russell 2000 have either marked or threatened all-time high territory during the most recent rally, the S&P 500 has been far weaker being rebuked on 3/12 and 3/13 at the 78.6% retracement level. The SPY ETF that we use to track the S&P has traded lower for five straight sessions chalking up distribution days during three of those sessions. This now leaves the ETF with seven distribution days over the last 18 trading days which raises a caution flag for us. The index closed just beneath its 50 day simple moving average, while it still holds above the exponential average we prefer to use here. With the Nasdaq showing relative strength, we feel it is important for the index to at least find support at the key 50 day moving average. It is likely a large divergence between the two indices won’t carry on for an extended period of time. This led to trading alerts from myself and Greg for our members to go long inverse ETFs SQQQ and DXD earlier in the week. We booked partial swing gains of 10.5% and 9% on those positons Friday and members are currently sitting on gains of nearly 15% and 10% with the second half of their position.

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Weekly Market Prep For 3/19 $SPY $QQQ $IWM #Nasdaq #trading #markets #stocks

MARKET GAUGE: Confirmed Uptrend

SECTORS EXHIBITING RECENT STRENGTH: Computer (Data Storage), Computer Software (Security), Computer (Technical Services), Computer Software (Data Base), Computer Software (Enterprise), Telecom (Fiber Optics), Internet (Network Solutions), Commercial Services (Staffing), Medical (Products), Medical (Outpatient Homecare), Medical (Hospitals), Transports (Airlines), Financial (Regional Banks).

SECTOR EXHIBITING RECENT WEAKNESS: Medical (Generic Drugs) Medical (Ethical Drugs), Retail (Discount/Variety), Retail (Major Discount), Apparel (Clothing Manufacturers), Building (Heavy Construction), Mining (Metals/Ores), Oil/Gas (Drilling), Oil/Gas (Refining/Marketing) , Transportation (Logistics), Chemicals (Basic).

OVERVIEW: Fridays “Quadruple Witching” options expiration of stock index  futures, stock index options, stock options and single stock futures led to increased volume across the indices, but not much in the way of price change. The S&P 500 and Nasdaq finished only fractionally higher while the small cap Russell 2000 led all gainers with a 0.56% advance. The Nasdaq 100 was the laggard closing off by 0.30%. After another week of trading not much has changed in the way of leadership. The Nasdaq Composite continues to show the most strength, along with the small caps, while the S&P 500 lags behind strapped with six distribution days over the last 18 sessions. History shows us, even as recently as 2017, markets can advance when straddled with a series of distribution days like we see with the S&P however, not all markets, bull or bear, are created equal. While the bull market of 2017 created a wide variety of trading vehicles for bulls, this years market, so far, appears to be more of a “stock pickers” market where traders will have to navigate more carefully and be much more nimble while looking for solid opportunities. Many traders can acquire a “paycheck mentality” during easy bull markets where they expect to constantly ring the register collecting easy profits from trade to trade. This type of reinforcement becomes a large obstacle for traders when market conditions naturally and eventually become more volatile. This is why it is imperative to routinely look at the behavior of the major indices as well as the current individual stock leaders to see what kind of footing the market is currently on. Is there wide spread distribution occurring across the markets? Are there very particular areas of strength or weakness? Are there signs of a possible sector rotation in the works? Is the current market environment lending itself to being more aggressive or less aggressive? Predicting the market is a foolish endeavor, but the knowledge gained by studying and monitoring the markets health can give you a tremendous edge over the competition and be invaluable to your bottom line. For now, despite the recent distribution in the S&P, we leave our Market Gauge in a confirmed uptrend, but we continue to preceding with a degree of caution. With that let’s take a more detailed look at where we stand with the four major indices we track heading into next week.

NASDAQ- The Nasdaq Composite continues to be the index leader. The index marked an intraday all time high on Tuesday before reversing and closing near the lows of the day on increased trade. This technically bearish outside day may not necessarily be an ominous sign but it may be something that keeps the index at bay for a while longer, it remains to be seen. The index reclaimed its 50 day EMA on the 2/14 follow through day that confirmed a new rally that was initiated on 2/9. The index did come back to successfully test that line on 3/2 which yielded a bounce that ultimately led to the 3/13 intra day high. In the process, due to the big rally last week, the index lost two distribution days leaving it with three such days now in the current count. Remember, five distribution days within a 20 day period, or seven days within a 25 day period should raise caution flags for traders, so the current outlook in this regard is positive for the Nasdaq. Although the index looks solid in many regards, confirmed rallies are not always guarantees to new long term trends, so we will continue, as always, to monitor the action closely. In particular, we will be looking for any pullbacks to be contained at the 50 day EMA.

SPY- While the Nasdaq, Nasdaq 100 and Russell 2000 have either marked or threatened all-time high territory during the most recent rally, the S&P 500 has been far weaker being rebuked on 3/12 and 3/13 at the 78.6% retracement level. The SPY ETF that we use to track the S&P has traded lower for………… For the rest of this article plus everything our premium members receive including, real time stock trading alerts, watch lists, sector reviews and more head over to http://www.ttptrading.com and sign up for only $69 per month where you get access to both myself as well as Greg Krupinski of GK Trading. See you there!