May 082014

I often like to publish a technical overview of the top components of an index or sector that may be setting up for a nice move as analyzing the charts of the most heavily weighted components will often give you a heads up on where the index or sector may be heading. Normally I will use a video format as it allows me to discuss all the nuances of the chart as well covering charts of the same stocks on multiple time frames. Today I've decided to simply post one chart of each of the top 10 largest components of the S&P 500 index.

Although my primary focus has been on the Nasdaq 100 lately, I have been intrigued by the resiliency of the less tech-heavy S&P 500 and like most traders, I have been trying to discern if the $SPX will soon begin to play catch-up to the $NDX on the downside or vice versa. As I always strive to keep my analysis as straightforward and unambiguous as possible, I will state that my expectation at this time is that the $SPX is poised to start playing catch-up to the $NDX & $COMPQ by moving lower. Below are the charts of the top 10 components of the S&P 500 listed in descending order by their current weighting in the index. Although I can't discuss all of the details of each stock on a single time frame static chart, I've tried to highlight the most salient technical developments of each of these market leading companies. Click on the first chart to expand & then click anywhere on the right-hand side of the chart to advance to the next chart.

Dec 132013

In updating the trade ideas today, the following stocks will be removed from the Active Trades category to the Completed Trades category in order to focus on the most attractive opportunities at this time.  Many of these trades have already hit a profit target or remain profitable at this time while a few are slightly underwater at this time.

HOV- Although this trade is still profitable and may very well continue lower to hit one or both of its price targets, HOV has been locked in a frustrating trading range ever since the entry earlier this year.  In order to focus on more promising trade ideas, HOV will be removed from the Active Trades category.

JPM- JPM is currently trading around 5.25% above the original entry which came on a break below the 14-month uptrend line back in mid-August.  Just over a month later, on Sept 25th, JPM hit a low 50.06 vs. the  first price target of 50.04.  From there the stock bounced to recently make a marginal new high while putting in even more powerful negative divergences in place so as with so most other recent short trades, this one may very well go on to hit the second and final target of 46.58.

KBH- This home builder stock hit its first profit target about a month after the short entry was triggered back in late June and has since floundered around in a relatively tight trading range around that level, still profitable at this time.  Like most other short trades being removed today, KBH very well may break down from the current trading range and move lower to hit the second and final target but will be removed in order to focus on trades with a more favorable R/R at this time.

KEX- KEX moved lower after entry but reversed about a point above its first target and has been backtesting the broken uptrend line from below since.

KO- KO is another short trade that is still profitable and continues to looks promising longer-term for those who wish to remain short.  The short entry for KO was triggered on a break below the steep ascending channel on the daily chart back in late May.  KO went on to drop about 13% from there, so far reversing just shy of the first target but is still profitable by nearly 7%.

LEN- As with the HOV & KBH trades mentioned above, LEN is another home builder stock which has already hit it's first profit target and remains solidly profitable at this time.  Two separate short entries were posted on LEN, giving the trade an average entry price of 38.22.  LEN is current at about an 8% profit from that level after making it down about half-way to the 2nd target for a nearly 20% gain before reversing.  As with the other home builders, LEN has chopped around in a trading range around the first target level for months now.  As with the other builders, I believe that the additional target levels will likely be hit over time but I am removing LEN from the Active Trade category in order to focus on trade currently offering clearly bearish technical patterns and better R/R profiles.

M- M (Macy's) was most recently covered in the Nov 7th Short Trades Update video in which I mentioned a typo that I made on the final price target.  M quickly hit the first profit target after the entry earlier this year and continue to fall reversing exactly on my final target line, however due to mix-up, I had incorrectly listed that target as 42.08 on the chart when it should have been about 15-20 cents higher.  (The stock reverse at 42.18 and never looked back).

PWRD- PWRD hit the first profit target shortly after entry and still remains profitable.  However, the stock has recently experienced some very volatile, sloppy price action which has muddled the charts somewhat. As such, PWRD will be moved to the Complete Trades category at this time.

SBH- This trade is essentially flat, trading less than 3% above the original entry price.  Basically, the stock has chopped around in a frustrating trading range for what seems like forever and with out a clear read on the chart, SBH will be removed from the Active Trades category for a slight loss.

UNP- UNP was shorted at 156.00 in Sept and is currently trading at 160.72 or about 3% higher.  As the technical picture is now somewhat obscure, UNP will be considered stopped out for a small loss and moved to the Completed Trades category.

The remaining Active Short Trades look fine at this time and updates will continue to be posted as important technical developments occur (targets hit, breaks above/below support/resistance, trendline backtests, etc...)  As always, feel free to contact me if you any questions about these or any other trade ideas posted on the site.  Also keep in mind that many of the trade ideas now have links to the live, annotated charts which are updated regularly, sometimes without a new post & static chart.  The live chart links (for trades that have one) can be found under the most recent posts by selecting the ticker symbol from the "Posts By Ticker Symbol" drop-down menu on the right sidebar of the home page.  This would be the preferred method when following a trade (vs. bookmarking the live chart link) as the link address to the live charts are occasionally changed or updated.




Nov 072013

This is the second and final video covering the highlighted Active Short Trade Ideas (with a separate video covering the Long Trade Ideas to follow). The trade ideas/charts are discussed in the following order: HSOL, HTZ, JASO, JPM, KBH, M, MIC, NTRS, OSTK, PWRD, QIHU, SPB, TSLA, YUM, & Z. To skip ahead to coverage on a particular stock, click & drag the circle white circle on the timeline at the bottom of the video. I find that these videos are best viewed using the Fullscreen option on phones, tablets and laptops while the Large Player size (available when playing the video on YouTube vs. directly from the site) works best for larger monitor sizes.

Aug 162013

JPM was added as Short Setup on July 31st with an entry to be based upon a breakdown of this 14 month uptrend line.  The stock did make a solid break below that support level yesterday and moved back higher this morning to kiss the trendline from below before dropping back.  As such, JPM still offers an objective short entry or add-on around current levels as long as prices do not close back above the trendline.  Please note that I have adjusted the price targets on this trade.  Stops should be determined based upon one's preferred target.  The previous daily chart followed by today's updated daily chart are shown below.

Note: For those adverse to shorting individual stocks, as the largest US financial institution, JPM typically carries an over-weighted position as a component of the financial ETFs such as XLF (1x long), SKF (2x short) and FAZ (3x short).  These ETF's can be used as an indirect proxy to short JPM although the leveraged ETF's, in particular the 3x's, should only be used for very short trades lasting no more than a few days and even then, only by very experienced & aggressive traders.  As always, make sure to account for the effects of leverage on your position sizing when trading leveraged ETFs.  (e.g.  $10k of XLF short = $5k of SKF long as you can expect roughly twice the gains (if correct) or twice the losses (if wrong).

Jul 312013

JPM dailyAs this daily clearly illustrates, JPM has traded in near lockstep with the S&P 500 in recent years.  Current, as with the $SPX, the recent breakout to new multi-year highs has some red flags that could spell trouble ahead for the largest financial institution in the country (as well as one of the top ten components of the $SPX).  The last short trade on JPM was stopped out for a loss but JPM will be added back as a Short Setup with an entry to be triggered on a break below this primary uptrend line.

Aggressive traders could establish an initial position here with the intention of adding on an official breakdown.  However, with the market still in buy the dip mode until proven otherwise, as well as most trend indicators still bullish for now, my preference is to hold off for some additional evidence of a trend reversal in the broad market and/or a break of the JPM rising wedge pattern before taking a short position.  Targets & stops TBD upon entry. (edit: targets listed on chart were from previous trade and have not been updated).

May 192013

The following short trades will be removed from the Active Trades category.  Some of these trades may have already hit one or more profit targets while others failed to reach their price target(s).  Many of these trades have also exceeded their suggested stop level while others may not have but in the long overdue process of cleaning up the Trade Ideas, I will be removing any trades that no longer look attractive from a technical perspective in order to make room for some new trade ideas.