Saturday, January 26, 2013

S&P500 Cyclical Buying Opportunities

Sitting on the sidelines with a hoard of cash? Thinking about piling in because the market is making new highs everyday? Let's look at the past 3 years on an SPY Weekly chart to see what the pattern has been.

Piling cash in at market peaks has historically been a bad time to invest longer term. You may get some short term gain but there will be an inevitable reversion to the mean. In other words the 50 week period moving average has been a better place to put your hoards of cash rather than accumulation cycles.

The last time we had this opportunity was in November and the market has screamed since then. We need to wait until the next sell cycle happens (which it will). When that cycle is at or under the 50ma it has been a great opportunity to buy. In 3 years the 50ma has risen and continues to trend higher.

I'm not piling in cash on this current uptrend. My trades are small and nimble, taking advantage of the incremental moves higher in the market. When the market cycles again and we revert to the mean (as stocks always do) thats when I'll put large amounts of cash back to work.

Thursday, January 17, 2013

Trade Review: +24 Ticks on the /ES

Great day to trade futures. Morning started strong with good housing start and job numbers. Missed the initial trade on the news at 5:30am. I entered the trade after a W pattern breakout. Market got its footing and it was off to the races. Missed a little bit of the move as it topped out at 1480 but I'm ok with that.

Sunday, January 13, 2013

Performance Stats: From 12/2/12 Set-ups

I've been tracking the performance of my trade set ups that I posted from Dec 2:

• Tracks performance of (1) share using closing purchase price from posted chart.
• Using a -5% stop, anything that fell below that was eliminated. In this case 2 of the 15 stocks were eliminated by stopping out.
• Closing prices as of 1/11/13

Saturday, January 12, 2013

Trade Set-ups 01/12/13

If the market breaks out to new highs this week, these stocks have room to move higher and could be at ideal buy points. All long set-ups.

Look to buy on a breakout above 174.00 with supporting volume.

Looking for a breakout on average to above average volume.

Looks to have formed a decent base and breaking out of this descending trend line above the 50ma.

Inverse head and shoulders continuation pattern breakout on strong volume. Look for this to move higher.
A bounce off support with decent volume. Could be a good place to start a position. Looking for this to at least hit the 50ma.

Looking for this to break this descending trend line on volume. Would buy on a breakout.

Bounce off the 50ma, good buy point.

Weekly, look for this to breakout of this resistance and move higher. Apple earnings will be a big factor in its performance. A breakout could be an anticipation move on earnings.