Welcome back for another edition of the Week Ahead post. In this post I go over what to expect heading into the next week of trading. If you have never been here, I am glad you are here now. You will like it. This post is designed to jump start your preparation for the next trading week, not do it all for you. Anyways, let get right into it.
Last week the main idea was gap holds. We determined as long as held the gap up we saw on Friday we would like continue higher. There was a lot of stock action that was very as well at the time. We decided on heading into last week open to a gap fill or open to more continuation. To determine what the case was we would wait until last week’s Monday to see if the gap would hold. It did. Once last Week’s Monday held and the gap was untouched we could then determine there was demand for $SPY and other stocks in this upper range. On Monday (after we held the gap up), we were looking for stocks that were coming out of strong bases and showing relative strength. The banks just happened to meet that criteria. $C (Citigroup) in particular was showing the best pattern as it ‘held higher’. Later in the week we saw the banks move and then the market cool off and try to work off the extendedness (overbought) nature of the market at the time.
Here it is the link to last week’s post – http://www.bencbanks.com/the-week-ahead-for-5613/
Now that we have that done we are going to talk about the upcoming week and after that some charts and videos! Going into this upcoming week we must first acknowledge that the bulls are still decisively still in the control. The “smart” (dumb) people continue to fight this rally. I do not know why but it continues to happen. Once we determine that the bulls are still in control we can then move on to the state of the market. The last 2 days of the week last week we saw some nice digestion to absorb the massive rally we had seen the week prior. This ‘high and tight’ consolidation is very bullish for higher prices. Essentially what this ‘high and tight’ consolidation means is that the bears were not able to take above much at all of the latest move, and it shows there is still demand at these levels. What we would like to see now is some grinding higher. The grind higher would mean a slow grind higher (not huge bursts). Of course we are still a little extended from the 8 EMA which is a small concern given the demand up here it should not be a huge worry. In summary, do not fight the trend. I would rather see you wait to buy (if your not comfortable) than short up here. NO ONE has been successful shorting this market for more than a day or two so how are you going to do it? Be humble in front of the market, you are NOT smarter than it.
At this point we are going to take a little break from stocks. Anyone that has been on this post before knows what this is. What I do in this section of the post is I share a video/song that I enjoy just to take a breather from all the work and stocks. There needs to be balance in your life and therefore I want to try to show you that balance in my posts as well. This week is a video of Darius Rucker (A Country Singer) and a song called “Don’t Think I Don’t Think About It”, Enjoy. We will be right back with some more stocks, do not worry!
Alright now that we had some fun we can get back to stocks. Below are the two videos I MAKE every week to go over the action. I also included a trade review video at the bottom of the 2 videos. After these videos we will see some annotated charts. See you in a bit.
Alright this brings me to the end of the Week Ahead post. I hope you enjoyed it. Below are a number of annotated charts for the Week Ahead. If you would like to Contact Me for Questions/Comments please do so by email or Stocktwits or Twitter.