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FOR THIS WEEK'S POSITION TRADE NEWSLETTER
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Daily
Editorial: |
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Market Climbs Slightly Higher, but at a
Slower Pace
Good morning!
Following the strong upside from last week's early January rally, the
market as a whole became a lot more choppy on Monday. Risk in the
indices was pretty high throughout the day because the very gradual
upside continuation off last week's move increased the odds that
intraday corrections would be more steep. They can also begin without
really giving a lot of notice.
The S&P500, Dow Jones Ind. Ave., and
NASDAQ Composite all started the day near Friday's closing prices. The
most strength came from the Dow Jones and the home builders, which rose
steadily throughout most of the session. The 15 minute 20 sma served as
support and aided in pushing prices up into the late morning.
It was a tough day for EMini futures and index-following stocks despite
the support. There was simply too much overlap in price from bar to bar
on the 5 minute charts to create really nice risk to reward setups. It
was necessary to keep wider stops if following them in order to not get
flushed out.
Despite the greater risk in the indices
themselves, a lot of stocks hit 52-week highs on Monday with some very
strong intraday moves. In the NASDAQ the top gainers were RMBS,
SNDK, URBN, XMSR, ALKS, and CELG. In the NYSE they were TOL, DHI, CTX,
PHM, KBH and LEN. The NYSE had a lot more of the daily breakout
patterns, while the NASDAQ had a larger number of strong moves in
stocks that had been either selling off or had wider ranges or coming
out of pivots off lows.
The
14:00 ET reversal period saw that rapid decline that had been looming
behind the curtains throughout the day. A 2 minute Avalanche triggered
a short into 14:30 ET. The decline increased until the market came into
support from morning price levels around 14:45 ET. There was also a
decent volume spike on the smaller intraday time frames to indicate
exhaustion on the 2-5 minute charts.
Initially it appeared that the market would create a 15 minute
Avalanche as it hugged support into the last hour of the day. The pace
turned over, however, with more rapid upside compared to the downside
within the correction off afternoon lows. This led to a move back into
the 14:00 ET breakdown price resistance zone right at the close. For
me, I found the 15 minute upside breakout and the 14:00 ET reversal the
easiest patterns to follow, but even these had a lot of overlap and
more choppy trading.
The return to highs into the close again places the bias intraday on
the bulls. The risks that we dealt with on Monday remain, however, so
I'll be focusing again more on intraday setups in individual stocks as
opposed to new swingtrades or a lot of index trading.
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Economic
Reports and
Events:
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Jan 10:
Wholesale Inventories for Nov. (10:00 am)
Jan 11:
Crude Inventories 01/06 (10:30 am)
Jan 12:
Export Prices ex-ag. for Dec. (8:30 am), Import Prices ex-oil for Dec.
(8:30 am), Initial Claims 01/07 (8:30 am), Trade Balance for Nov. (8:30
am), Treasury Budget for Dec. (2:00 pm)
Jan 13:
Business Inventories for Nov. (8:30 am), Core PPI for Dec. (8:30 am),
PPI
for Dec. (8:30 am), Retail Sales for Dec. (8:30 am), Retail Sales
ex-auto
for Dec. (8:30 am), Mich. Sentiment-Prel. for Jan. (9:50 am)
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Earnings
Announcements of Interest: |
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Only stocks with an
average daily volume of 500K+ are
listed. List may not be complete so be sure to always check your
stock's earnings date before holding a position overnight. (A) =
Earnings after the close, (B) = Earnings before the open,
(?) = Earnings time not specified at the time of this writing
Jan 10: DNA
(A)
Jan 11: -
Jan 12: MI
(?), MTG (B), MOS (?)
Jan 13: -
Jan 16:
AAPL (A)
Jan 17: ASO
(B), CAL (B), INTC (?), MEL (?), SOV (A), WFC (B)
Note: All economic numbers
and earnings reports are in lines with those compiled by Yahoo Finance.
Occasionally changes will occur that are made after the posting of this
column.
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