Ben C Banks

Welcome back to the Week Ahead post. If you have never been here before, essentially all this post is something to help you on you for preparation for next week. Let’s jump right into it.

This past week we had a while ride as the volatility has increased alot of over the past few weeks. In a highly volatile environment AKA a choppy market, breakouts tend to fail and the mean reversion trades tend to dominate. This was very apparent this past week in the $SPY because as soon as we went ‘potently’ in one direction we just as quickly snapped back in the other. Personally, I do not like these environments because I am naturally a momentum trader and have never been that good or ‘into’ the mean reversion trades. Unfortunately, the market does not care about what I think and want and therefore, I need a plan on how to deal with it.

At it’s simplest form when the market is in a slow grind higher in a low volatility environment I will take all the breakout trades and let them run for what they are and have relatively loser stops on them – treat them more as swing trades versus tactical trades.

During the highly volatile environments given that breakout will tend to fail, I will trade them but look at them on a more granular approach. This means I am quick to take them off the table. I have found about the time it looks the best and it looks like it is going to ‘fly’ is the about the the right time you should take the breakout trade off or at least raise your stop alot.

Now the more difficult of matters is determining when the market environment has changed or is changing.

This is done by paying attention to a number of different things and then combining them to form a thesis and waiting for the thesis to be confirmed by the market. Often times a potent day (outside day) will lead to at least a warning and a couple days of misdirection and high volatility. When you see this, this at least puts you on watch for a change in market character. This technique can be used for both downtrending and uptrending markets, both have outside reversals that should be notices. Often times these lead to capitulation and a change in market character.

Now we are going to get into the two videos for this week here they are -

Sector Analysis -

Security Analysis -

Finally, here are the charts – I did not do as many this week as there really was no use to since they really all look the same and have no great set ups.

Welcome back to the Week Ahead post! I know last week’s post was not that great but that was because I had exams and I did not have time to do the full Week Ahead post. Just so you would know, my time studying paid off. I got all A’s for Junior year which is a huge accomplishment for me. I am very proud of that, and it has never happened to me before. Anyways, enough of that… I will stop bragging now.

In this post, if you have never been here before, I go through all the sectors and then a lot of different securities that I believe are setting up for higher/lower prices that have actionable set ups. In this post you will find two videos, one sector analysis video, and one security analysis video. Following the two videos you will find 20+ annotated charts with a lot of set ups and thoughts on them as well.

I hope you enjoy, and by the way, I have an announcement to make about the future of this website so read on or watch the Sector Analysis video and I will talk about it. Have a good one. Let’s get into it.

So this week had a wild ride. Up, down and then up again. Really a change in market character this week as volatility dramatically increased. When this happens, you will have quick moves and some very nice intraday moves as well. Intraday moves are not usually where I specialize but occasionally I will see something extremely intriguing that I must take on an intraday basis. When this happens, the breakout patterns will have a higher tendency to fail and give back the gains sooner relative to slow, low volatile environments. I still believe going into next week we are in a volatile environment with some potential to get back to a grind higher. The reasoning behind this is that we have bounced nicely from the 50 SMA (not on charts), but more importantly the 1600 key level on the SP 500. The true test for the market and most stocks heading into next Monday and specifically Monday is going to be if they are able to ‘hold higher’ and then continue and breakout to new highs. In my opinion (price has not confirmed this thesis yet), we will see a grind higher and a continued trend sooner than later – I remind you though, this is just an opinion. Not an actual call or guarantee. Price still needs to confirm the thesis. With an inside day on Monday alot of charts will set up for higher prices and the stocks that have shown relative strength (banks) will likely outperform.

If however, we do not see an inside day to hold higher on Monday we will likely continue to chop around in a volatile environment until further notice. Let’s hope the later does not happen but we will see.

At this point in the post I usually share a video (usually a song) that I enjoyed. I do this to take to represent taking a break from the stock market and relaxing a little. So, here is this week’s video. It is a country song, but that is more than likely what you will always get from me.

Alright, now that we have had our fun for a little while we can get back to some stocks. I am sorry if you do not like Country music, I think it is awesome. Before we really get back into stocks though I want to tell you the announcement I have been talking about for a few days now.

As you all know, I do something called the Daily Analysis after the close each and everyday and I have done this EVERYDAY the market has been open since mid October of last year. So, it hurts a little to say this but this summer I am transitioning to only doing two posts a week. I am doing this because I will be gone a lot of summer anyway and it will be a nice break for me also. So, until September at the earliest I will now be doing the ‘Week Ahead’ post like this one that will come out on Sunday morning and a Mid-Week Update which will come out on Wednesday evening, every week. Both of these posts will be longer than the regular Daily Analysis posts so you do not have to worry about that. Also, I will still be on Twitter and on StockTwits on more than likely, a daily basis posting charts and thoughts. So, if you have not already followed me on one of those, this would be a good time to do so.

Now that we got that out of the way we can go onto the videos that I made this week. The first one is a trade review video. I do not always have one of these on here but every so often I will throw one on here. This one is of the short $XLE trade I had this past week. Enjoy.

Now that you have read all of this we can let you relax a little by watching the Sector and Security Analysis videos. Enjoy. The two videos are followed by 20+ annotated charts. One more reminder, if you have not already followed me on Twitter and StockTwits please do so as I will not be doing the Daily Analysis as of Friday 6/7/13. Have a good week!

Here are the charts - 

Welcome back to the best post on the web pertaining to stocks (or at least I would like to think that, I know it is not true though). Anyway, if you have never been on this post before I will take a minute and explain it to you. Essentially what this post is designed to do is provide you with a launching pad to do your own due diligence from regarding your preparation for the week ahead. I am not here to do all the work for you, just to help. If you plan on learning this business you better be doing your own hard work because to make it as a trader you need to have your on unique formula that you have developed over the course of your hard work. We can now move on to matter you all came here for… Stocks.

A quick review of lat week -

$SPY – we said we were in an interesting juncture as we held below the 8 EMA and below the bottom half of the large candle but still above the 21 EMA. We went on to say stay that a long trade back over the candle from last Friday and we could see a nice little move back to all time highs. We ended up gapping on Monday pretty large so that trade never developed. We also had a few set ups that looked good going into this week but a good many of them failed as the week progressed. Some of the set ups were: $EA $ATVI – we alos discussed how their was a chance $GLD would would bounce up and out of it’s wedge pattern but remain in an overall downtrend. That exact thing happened this week and now $GLD looks lower again.

Now that we have done our review of last week we can talk about this upcoming week an the markets, which is what you really likely really care about since you are here.

There was talk all week about the wedge pattern. If you are on StockTwits or Twitter you more than likely saw posts and talk about this. Why? Because this pattern was a major inflection point for the market – the resolution of this pattern would like send the market in that direction for at least a few days. Well long story short, the market broke the wedge to the downside and in a pretty potent way on Friday afternoon. Basically we had more than a 1.5% in the $SPY on Friday and it does appear that we will make our way down to the 1600 level, which is the next major support level and breakout level from last month.

As for set ups, I am not seeing much from long the side. I feel like the consensus is that most traders are looking to short a gap up on Monday to eventually reach a target of 1610 to 1600. I would not be heavy long into this week ,and if I were it better be for a day trade or a very very awesome set up. If you are not comfortable shorting, just do not do it – take some time off and come back when the charts are set up again from the long side.

At this point in the post I will share a little video I found entertaining this week.

Alright. Now by this point you are likely wondering where the rest of the post is.. Well, I am sorry to inform you that this is the end of the Week Ahead post for this week. I have finals next week and this weekend has been spent (for the most part) studying for those and therefore the charts and the videos will have to wait for another day. I promise I will be back next weekend with a better than ever Week Ahead post, school took priority this week. Below are the couple charts I posted on Friday. Have a great rest of the weekend. Will see you tomorrow. It’s summer!

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