Market Orientation & Bias: Neutral
1. Recap of Last Week
Last Week’s Post: CLICK HERE
A. General Recap
Most of the week was spent pulling back in a ‘drip, drip’ type of fashion, which is without a doubt the most annoying type of sell off there could be in the markets. The situation in the Ukraine did escalate this week but the real tell will be the referendum vote this weekend, would not be surprised to see the futures have a strong reaction to the vote.
This past week many momentum set ups (my forte) failed, which caused a lot of frustration to those not expecting losses and without processes. We all have losses, get over it. Keep life in perspective, learn and move on. You make yourself you, if you aren’t you are you are someone else’s and no longer have control of your perception (sorry for the small rant).
We are now in an awkward place in the markets, stuck between two time frames as we are still extended but also still in a bull market.
B. Past Set Up Recap
AA – Looked very promising throughout the week and I was long this stock. However, thursday’s weakness took me out and it now looks like it will need alot more time to consolidate.
FCS – As momentum tapered off in the overall markets, so did it in this name. As it failed to breakout to new highs.
RMBS – The best performing stock from last week’s watchlist. Breaking out to new highs nicely, still long this one.
2. Strategy For Next Week
A. General Broad Market Thoughts
Trader Stewie on Twitter put it very nicely on Friday when he said ‘in an awkward place’. To me, this is an extremely accurate way to describe the current market conditions. On one hand, it is going to be hard to short because it is still a ‘bull market’. However, on the other hand, we are still extremely extended on the longer term charts which makes it difficult to get core moves out of some bases. We are essentially in the middle of two time frames, which makes it uniquely difficult to time this type of move.
Thus, I will remain neutral during this time. I am not bearish nor overly bullish. I will take the set ups I see and the ones that present themselves but I will remain aware of how extended we are overall.
Here is what we said last week about this past week. It still remains true this upcoming week and without a doubt proved true this past week.
There is without a doubt still a lack of HIGH quality set ups and a pullback would change this, but we of course do not always get what we want. Heading into next week, I think a lot remains the same. We will take all the set ups that come our way, but with a ‘grain of salt’ as many of the names are extended, and the quality is lacking.
Here is a shot of $SPY, a 50 SMA seems likely.
B. Video Analysis & Watchlist
C. Set Ups & Charts Watchlist
Notice: These set ups are the best I could find, many could still use more basing out BEFORE breaking out to create the highest quality of set up.
AVB weekly – Bull flagging ahead of downtrend line. Looks poised to breakout.
EGHT – Something to watch over the next FEW weeks. Nice green bar on Friday, a lot of relative strength there. Likely breaks higher from long term consolidation in the next few weekly.
IDTI – Could use a couple inside days before breaking out but overall a very nice and healthy looking chart showing a lot of relative strength. Breakout likely over next week or two.
MMP – Not my favorite set up but overall a nice looking bull flag.
PRE – I like the long base in this stock the most, a lot of potential here to run to new highs.
3. Current Positions
RMBS – Long since last Friday, broke out nicely this past week. I think it challenges new highs soon.
4. General Tips & Reminders
1. The market is here to make money, not be our friend.
2. You will get knocked down by outside forces that you can’t control but NEVER ‘knock yourself down’, learn and move on.
3. Get some exercise as it begins to warm back up.
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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