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. Enjoy!
Twitter – @BenCBanks
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Summary of this past week:
This past week was a roller coaster ride and likely is considered one of the more frustrating weeks lately trading wise. Early in the week we had a market that simply would not do a thing, it chopped around and would not go up nor down. Later in the week (Thursday), most traders went home believing we would finally get resolution and likely another pullback – but nope! Friday’s action engulfed Thursday’s almost entirely leaving traders a ‘dizzy’ feeling heading into the weekend as we failed to break down or up when we ‘should’ have.
Twitter IPO: Thoughts and Potential Actionable Trades
The Twitter IPO also had a lot of hype behind it. For the first half that is all anyone talked about. Social Media was buzzing with questions and comments ranging from where it will open on Thursday to people’s expressing their opinions on the valuations. However, despite the immense amount of excitement leading up to the IPO on Thursday, after it opened the excitement tapered a lot. Continuing into Friday many people were realizing there was not much opportunity from a trading point of view and therefore simply leaving it for the scalpers. I did an article on Thursday in which I spoke about the lack of trading opportunities in Twitter on IPO day, you can view it here – http://www.bencbanks.com/twitter-induced-high-euphoria-turns-to-panic/
Heading into next week it will be interesting to see if Twitter is able to hold Friday’s lows and create a 80/20 trade for a reversal after being down ~8% since the opening print on Thursday. Many brokers do have shares to short currently making taking long trades the only option but I must caution you, don’t trade it because of the name, trade it because of the price action.
General Market Thoughts for the Upcoming Week:
After I did my scans for the upcoming week on Friday afternoon I was left with an interesting result. Logically one would assume that after an up day of 1+% there would be an immense of new long set ups to trade. This was far from the case. There are some (I will get into them shortly) that are of interest but nothing of the quality and quantity in which I had expected after Friday’s action. The long set ups and the short set ups in which I did receive from the scans were of unusually low quality. A few days of digestion and price contraction would do many stocks a lot of good as many of the stocks I saw had relatively ‘relaxed’ set ups (versus ‘tight’), or momentum lacking.
Heading into next week I would like some price digestion in the SP500 below the all-time highs (1774), but above the middle level of the recent range (1760). Another scenario for next week that I believe would be very bullish and allow stocks to set back up is a down open into 176.30 in the $SPY (SP500 ETF). A down open would create an opportunity for those who were not in on Friday to enter as well allow the charts to consolidate a bit more before tackling the all-time high breakout level.
Below is the Week Ahead video. During this video I discuss the indices, individual stock set ups, as well as some general trading thoughts. Below the video are the annotated charts. Enjoy!
Below are a few annotated charts, view the below video if you would like to hear full thoughts are the following charts (in no particular order).