Market Notes:
It looks like we have the start of an orderly pullback that provides a good entry for longs. The market gave up less than half it's gains on low volume. That's a bullish sign.
The 50 day moving average, which converges close to the bottom of yesterday's breakout bar, is an ideal entry point. Stops can be placed under that level. As for targets, resistance levels based on price are in the 87 and 92 ranges. That's a lot of upside reward with minimal risk.
Note also that RSI remains above 50. If the market is going to continue to show upside momentum, this momentum indicator needs to stay above 50.
If the market does fail and resume the downtrend, watch for a double bottom formation, with the first leg of the "W" already put in.
Trade Tracker:
I added two positions today. The entries weren't as close to support as I would like, but I do not want to get caught out of positions and missing a big move. Thus, I am scaling in. I took half positions and will add more if the market pulls back more.
500 FAS at $6.58
200 SSO at $20.77
Game Plan:
Continue to look for pullback to enter longs. ETFs include SSO, QLD, FAS, UYG, URE.
Focus List:
Steel and Ag stocks looked good on a down day. STLD, X, SCHN, MOS, TRA
SHLD and AXYS both should do well if the market bounces.
There are some nice looking energy stocks. NOV and OII are two of my favorites.
Disclaimer: All information and opinions expressed in this report are to be used for entertainment purposes only. The author of this report is not an investment adviser and does not give buy, sell or hold recommendations. Trading stocks is a risky undertaking, and due diligence is required before making a trade. Consult an investment professional before making a trade. The information in this report is not verified and may be incorrect. The author of this report may or may not hold a position in stocks mentioned in this report.