Market Orientation & Bias: Neutral
1. Recap of Last Week
Last Week’s Post: You can VIEW IT HERE
A. General Recap
We came into this week with a negative bias, this was confirmed Monday with a massive move down in the indices. Later in the week (Thursday and Friday), $SPY bounced huge and recovered all the losses from earlier in the week. Most of the time oversold bounces get faded at the 20MA, this was not the case this past week. As we closed above the 20 MA on Friday, the bulls now have a chance to take back control if they want early next week. Another focus this past week was the NFP number, of course ‘everyone’ on Twitter was freaking out about this number, but in reality it is simply a number. A friend of mine, Jon Boorman Tweeted about it along the lines of this – If you rely on the NFP as a part of your trade, you do not have an edge – this is so true. You cannot tell me when the last NFP day was based on looking at the chart. Don’t worry so much about it.
B. Past Set Up Recap
Let’s remember most of these set ups were on the weekly timeframe so therefore most of them are still very much in tact.
BBEP – Setting up very nicely on the daily, weekly is still holding it’s own. A must watch going forward.
DTE – Another one that is now coiled up even more on the daily frame inside of it’s large weekly base. It is still on my watchlist. Could be a huge winner once it breaks out.
HIMX – Still consolidating (this was the only daily set up last week) and it is still on my watchlist. Holding above the 21 ema next week before breaking out would be very bullish.
TOL – Weekly chart is still very nice. I am watching the daily charts for an entry, needs to tighten up a little bit more (price contraction) before I have more conviction with the swing move.
UPL – Broke out of the weekly base this past week. Looks good, but hard to chase it here unless you are a position trader. Let’s see if it can bull flag on the daily before we get back into this one. Very nice weekly base, should be able to run.
WR – Looks fine on the weekly timeframe. Needs some basing on the daily.
2. Strategy For Next Week
A. General Broad Market Thoughts
After a huge bounce on Thursday and Friday, it makes sense for some digestion. Digestion in the form of a bull flag would be the best case scenario. Once (IF) this happens, the swing set ups will come flooding back and it will be official the correction was ended.
At this point, we have seen an oversold rally, late last week, now we need to see a ‘commitment pattern’ to these higher prices. A commitment pattern is a price pattern, like a bull flag, that shows continued demand inside of a base.
Here at Ben C Banks Trading, we love to see commitment patterns. They give us a clear area to trade against with strong risk/reward.
B. Video Analysis & Watchlist
C. Set Ups & Charts Watchlist
CLR – A very nice long wedge pattern on the daily timeframe. Looks poised to breakout next week. Trade versus Friday’s lows.
CSIQ – An inside day would set this one up BEAUTIFULLY for a breakout. I love trading these momo stocks and if it can put in an inside day, it is one I will have a lot of conviction with.
DEPO – No clue what this company does. However, it is bull flagging nicely and showing immense relative strength. Of course it would be nice for another inside day, but if it strong, I doubt it will give us that.
GDX – Everyone is talking about GDX and GOLD on Friday. Perhaps that means they won’t make the move, but either way, they look really poised to breakout here. Over Friday’s highs is the trigger, swing stop below 23.00.
SUNE – An inside day is the only way I would enter this one. If it does not provide me with an inside day for more price consolidation, this set up isn’t near as good. Definitely one you should be watching though in the coming week.
3. Current Positions
CORN – I entered CORN on Friday versus 30.90 for a swing. I love the volume pattern, bull flag and overall strength in these intermarket commodity names.
4. General Tips & Reminders
1. There is still earnings, be sure to look up the dates.
2. Keep things in perspective, check out this post I did earlier last week on this topic – http://www.bencbanks.com/the-remarkable-beauty-of-conscious-relative-perspective/
3. WATCH THE OLYMPICS!
Have a great rest of the weekend. Email or Tweet me with any questions or comments.
The purpose of the Week Ahead post is to prepare you for the upcoming week in the markets. I do this not only to help others learn and develop trading skills but also to develop and cultivate my personal thoughts for the Week Ahead. Below you will find a written commentary portion followed by a Video Analysis the stock market and the set ups I am watching this upcoming week. This post is organized into sections, see bold titles and skip the items in which you are not interested in! Enjoy!
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