NYSE & Nasdaq

Mondays Game Plan


Breakouts: COH>55.00, EBAY>29.50, CHK>33.65, DPS>36.50, AET>38.50, DOW>27.00, UNH>46.25, KO>69.50,

Shorts: IAG (20.75), GG (52.00)

Notes:

SPY wedge pattern that could break to the upside today unless we get a significant gap down.

QQQ gap fill from August 17th.

IAG and GG should open higher.

Overall I have a feeling we will get a choppy day today in both directions prompting me to book profits on momentum.

Heres a chart that is about to explode.

Profit target reached

It exploded! Six and a half dollars is like 650 pips in FX terms after the breakout. Notice that prior to the breakout and from the first chart that the stock had been condolidating the day before and even formed a triangle intraday. The next day we opened lower where stops were triggered where immediate buying took place in the first 5 minutes.

http://www.cnbc.com/id/44344032

The beauty of equities is that its can be highly uncorrelated, the presence of so many sectors and their sub-industries make opportunities present at all times. The death cross is an indicator that market conditions have changed and that a new trend might be underway. However, this change might not be immediate, and being an intraday day trader, my job is to take advantage of high probability patterns, whether they are down op up on an intraday bases. I am not an investor who holds onto positions for extended periods. I hope this clears up some of your doubts.

Heres a chart with a level that I will be looking at today, that 121.00 level in the SPY will determine how the market moves today.

I wont be trading today for personal reasons, however, I will keep an eye on CIEN which had higher than expected earnings.

Well sure enough, we got a gap up with buying taking over. If I was an investor in this stock, I'd definitly be interested in todays price action. This could be the begining of a new accumulation phase.

When S/R levels dont get respected, draw trendlines. The SPY looks like a giant flag that is about to errupt in one direction pretty soon.

Very clear price action on this stock, more explanation on the chart.

Should this market move north today, I seriously expect COG to pop higher and takeout that $78.50 level , why? Well because it has touched resistance 4 TIMES and cause the XOP which is the oil and gas ETF was the strongest yesterday. I expect some follow through today. But again, anything can happen

Longs: COG (69.50), C (26.50), VAR (51.50), JDSU (12.00), MS (15.00), PEP (double bottom first), JNJ (63.25),

Breakouts: HAL< (39.30), AXP< (47.00), SWN< (35.50), PM< (64.50 & 200SMA), DOW< (25.50 5 touches on support), MS < (15.25), ETN (38.00), SNDK<38.75

Notes:

I have no clue as to what will work out from my longs and breakdowns, what is clear is that we are in a downtrend, so breakdowns are more likely, burst of momentum to the upside are also possible but in order for me to get long, I want to see a bottoming pattern before I attempt to catch a falling knife.

If JDSU can hold the $12.00 level then it would be interesting to trade it long.

SPY in an ascending channel despite negative events taking place, price closed at the support trend line after it bounced right off of it. Given these market conditions, I expect to see a gap on Monday in either direction, should the SPY open below the trend line then I expect 114.50 to be tested and should it open above Fridays close then I expect 115.50 to be tested. At this point, the market could accelerate in either direction on Monday, making it critical to prepare for the open adequately.

The Dow Jones Industrials DJIA is also at a critical level, 11000 were breached again on Friday. However, it had also been breached twice in the past month which was then resulted in strong buying. Buying could take place on Monday, but I consider that unlikely with the index looking like a steep head and shoulders pattern, the level to watch here is 10950.

QQQ the NASDAQ ETF is consolidating forming a wedge, a breakout in either direction is imminent, 52.75 is the level to watch for a breakdown and 54.75 is the level to watch for a breakout. The QQQ is the strongest out of the three indexes (S&P , DOW, NASDAQ).

As for individual sectors, the XLB will catch my attention on Monday with Dow Chemicals (DOW) being the main stock I'd be watching in that sector. 5 support touches in the stock market usually doesn't hold. This and the fact that the XLB broke down from its wedge and is pausing right above the key 33.00 level, which if broken down, should bring down the entire sector with it.

Here are the charts of the indexes discussed above.

Here are the charts explaining the idea on my DOW breakdown trade from my gameplan. The basic idea is that a break down in the sector would cause this weak stock in the sector to sell off. Its all about relative strength/weakness. I also have a snapshot of the percentage of correlation between the two which is at 82.14%.

DOW from the analysis above? Is it finally ready to breakdown??? Time will tell.

DX the dollar index has finally broken out! Should be interesting.

Longs: UAL, GG (51.50 50 DMA)

Breakouts: UNH>48.50, COH>57.00 (200 DMA), QCOM>53.00, JNJ<62.50, MCD>86.50, VLO (IDB S=21.80, R=22.50)

Shorts: CIEN (14.00 & 50 DMA), AET (51.00), WLP (66.50 & 50 DMA), KLAC (38.25 & 50 DMA), SNDK (41.00), ALTR (37.50), COST (81.00 & H&S Pattern hourly)

This is a stock I have been watching due to the following reasons:

1- Major gap and hold (a rule of thumb with these things is 3 days of a gap being unfilled usually signals continuation).

2- Two consecutive inside days with 200 SMA being right above.

3- 200 SMA right above.

The stars were aligning for this stock and I traded it exclusively during the last 2 trading days.

Just being lazy here sorry, what is CPX? I see it says Complete Production Services.

Looks like an interesting break, / gap. Did you catch the Gap?