Jul 172014
 
SPY 60 minute 2 July 17th

SPY 60 minute 2 July 17th

The SPY has now clearly & impulsively broken below the previously posted 60 minute bearish rising pattern, triggered the first decent sell signal for the broad market in a while. The targets posted earlier are still my current downside targets for the SPY, with T2 as my preferred target.  However, I am not adding the SPY as an official trade idea, preferring to short the most bearish looking individual stocks and/or sectors.

On a related note, all 5 of the recently posted short trade setups, BXS, CSGP, PNC, PACW, & KRE are all Active Short Trades now, having either triggered the previously posted entry criteria and/or added directly as an Active Trade at the time of the initial post. However, all of those trades also remain in the Short Setups category as they still offer objective entries around current levels. Only FRC remains as a potential short trade idea as I’m still waiting to see if it trades below the T1 support level again soon, plus I’d prefer to see it work off the extreme near-term overbought conditions as a result of the huge drop in the stock immediately following the breakdown yesterday. Also note that CSGP is not a regional banking stock, unlike the rest of the recently added short trade ideas. I do have a watch-list of other potential short trades in various sectors & I will post some of the more promising candidates later today.

click here to view the live, annotated 60 minute chart of the SPY

Jul 172014
 
SPY 60 minute July 17th

SPY 60 minute July 17th

The SPY just hammered off the bottom of this 60 minute bearish rising wedge pattern. Assuming that prices break below the pattern before moving above the recent highs, my two downside targets are as shown here. If so, T2 is my preferred target, which is the bottom of the 5/27 gap as well as the 50% Fib retracement level. Should prices move above the recent highs, these targets may be revised.

As far as the recent short trade ideas, one should always keep one eye on the broad markets when timing entries & exits on your positions. Support is support until broken and as I pointed out in the previous email, the SPY had just fallen to the bottom of the rising wedge pattern, where at least a minor reaction (bounce or consolidation) was likely. So far, the SPY has hammered off the bottom of the wedge & with prices still in close proximity to that uptrend line, i.e. – support, it would be prudent to wait for prices to either break below the wedge or bounce back to a decent resistance level before adding any new short exposure.

For subscribers of stockcharts.com, the live, annotated version of this chart can be viewed by clicking here. Those who do not subscribe to stockcharts.com are not able to view intraday charts, such as this 60 minute chart, only daily & weekly charts. I am considering adding intraday charts of some of the major index tracking ETFs to the Live Charts section so drop me a line if you would be interested in having access to intraday charts on via the Live Charts section.

Jul 172014
 
PNC daily July 17th

PNC daily July 17th

The PNC (PNC Financial Services Group) short trade setup posted yesterday triggered an entry today on a solid move below the 84.52 level. T1 at 78.20 remains the sole profit target for now but I’ve also added a potential target zone which comes in around the 72-73 area (with the exact suggested buy-to-cover level to be added if/when that target is officially extended).

click here to view the live, annotated chart of PNC

Additional notes: The BXS short setup posted earlier today has also triggered an entry by crossing below the uptrend line. KRE is one of the largest declining sectors today, trading down over 2x the losses of the SPY & QQQ on above average volume, so far a good sign that a right shoulder may be forming but still too early to say with confidence.

The SPY just kissed the bottom of the bearish rising wedge pattern shown here in the last update on Wednesday. The SPY may or may not need one more thrust up back inside the pattern but is starting to approach the point within the pattern where breakdowns typically occur. Therefore, any significant move below today’s lows on the SPY would signal a breakdown of the pattern & likely usher in additional selling.

Jul 172014
 
PACW daily July 17th

PACW daily July 17th

PACW (PacWest Bancorp) is another regional banking stock that looks to offer an objective short entry on a break below the blue primary uptrend line. An add-on to that position or a new short entry will also be triggered on a break below the neckline, should the right shoulder of this potential Head & Shoulders topping pattern become fully formed in the upcoming weeks.

To expand on my recent comments, several short trade ideas for the regional banking center have been posted over the last few days and a few more names in the sector may follow. When swing trading, whether very actively & short-term (days to weeks) or intermediate/longer-term (weeks to months while typically targeting the final target levels), the same rules of portfolio diversification that apply to investing hold true, one of the most important being: Never put all of your eggs in one basket. For example, Continue reading »

Jul 172014
 
BXS daily July 17th

BXS daily July 17th

BXS (Bancorpsouth Inc) will trigger a short entry on a break below the blue uptrend line. A second entry, add-on or new short trade will be triggered on a break below the neckline, assuming a right shoulder on this potential H&S Pattern becomes fully formed. Exact suggested target levels & stops will follow. BXS is another regional banking stock & a component of the KRE (Regional Banking Sector ETF).

Click here to view the live, annotated chart of BXS

Jul 162014
 
PNC daily July 16th

PNC daily July 16th

PNC (PNC Financial Services Group) will trigger a short entry on any move below 84.52 (today’s low). The sole profit target, T1, is 78.20 with a suggested stop above 86.70. Additional downside targets may be added depending on how the broad markets, the regional banking sector & of course, PNC trade going forward.

Typically, my preference is either to trade,long or short, a sector ETF or a handful of the individual components of that sector with the most bearish or bullish technicals. One of the primary benefits of trading an ETF in lieu of individual stocks is the diversification (many holdings) and efficiency (one round trip commission vs. multiple trades) while the benefit to trading the most bullish or bearish components of a sector is the potential to outperform the actual sector as going long an ETF gives you exposure to both the best as well as the worst performing names in the sector, ditto when shorting. PNC, as well as the previously posted FRC, are both components of the KRE etf that stand out as potential short trade candidates at this time. Additional individual short candidates in the sector to follow.

click here to view the live, annotated chart of PNC

Jul 162014
 

One of the reasons that I went ahead and shorted the KRE (Regional Banking Sector ETF) well ahead of the potential Head & Shoulders Pattern breakdown & in spite of a relentless uptrend in the broad market has as much to do with the technical posture of many of the individual regional banks within the sector. Since posting the official short entry on KRE shortly before the closing bell yesterday, I began mocking up charts & setting price alerts on some of the most promising short candidates Continue reading »