I think the theme of this past week was alot of chop and some downward action that COULD lead to further decline. Some people out there may be calling for the decline now and how it is imminent, well may it a possibility I think the theme of next week will be “we need more information”.
There are two potential play outs that will lead to initiating positions in the upcoming week.
1. The $SPY holds below the 156 area early next week for one to three more days, I think a trade lower will happen. We now need to see if the bounce we saw Friday leads to anything or if it means nothing and we hold lower next week. For me to swing short we need to hold below 145 for 1-3 more days and allow the 8 EMA to catch up. This would essentially form a bear flag.
2. $SPY trades higher and blasts through the 156 area next week and holds higher for more than a day. If this does happen I will likely look to initiate some swing long positions in the relatively strong stocks.
I do expect the first scenario to be a more likely outcome but that is not to say the second cannot happen. We need to have more information.
Last week I talked about how $SPY needed to hold the 157.75 area for at least another day and if we did we will likely see a grind higher similar to what we saw at the start of the year. We did not see that, and therefore the set up failed (not that it ever was valid as it did not hold higher). We also discussed some of the relatively weak sectors like $XLE which plummeted to the 200 SMA. This just goes to show you that the weak get weaker and the strong get stronger.
Now let’s have our weekly video like I promised last week. If you do not know why I do these it is because I want this post to be the best post of the week therefore I want to include something other than stocks. Skip it if you want but I like to share some of my favorite songs/videos. This week is Wagon Wheel by Old Crow Medicine Show (not the Darius Rucker one – this one is better), and no I do not understand the music video just listen to the song. Enjoy if you would like. Below we will continue with stocks.
Now we will continue on with some stocks. Below are the Sector Analysis and Security Analysis videos from last week if you would like to review them –
Sector Analysis – http://www.youtube.com/watch?v=ciTx0E0t_ZE
Security Analysis – http://www.youtube.com/watch?v=JRLWva9H81w
Finally, here are the two new videos for the upcoming week. One Sector Analysis and one Security Analysis video. Enjoy.
Sector Analysis –
Security Analysis –
And here at the end I have posted all the annotated charts I have compiled for the week ahead, enjoy. Remember to let others know of where you get your week ahead preparation from. Feel free to Contact me for questions/comments via Twitter (@BenCBanks) or StockTwits (@BenCBanks) or The Contact Me here on this website.