Wednesday, July 6, 2005
Issue Contents:
| 09:15 | Swing Trade Setups Featured charts for Wednesday July 6 |
| 16:15 | TrendVue Trader Talk Today's transcript. |
| 17:34 | Swing Scanner Results Wednesday July 6 closing data |
| 18:12 | Market Statistics For Wednesday July 6, 2005 |
Featured setups from “Tuesday July 5, 2005 closing data symbol scan”:
Jump to: Long Setups | Short Setups | Special Situations
Notes for the Day
- Markets are stuck in a range despite the uplifting performance yesterday; we can trade long or short here with a slight bias to the short side since this range is not the upper-most trading range
- Oil > 60. Nuff said if it stays strong… although if markets do continue to show strength in the face of 60$ oil that’s a positive indicator to file away for future use.
ETFS
QQQQ – I’m monitoring either side of the lower most range for a long or short, or any significant intraday pattern (off 20 or 13M charts) and will hold the new position only if it closes strongly in favour.
DIA – same treatment. Remeber price can grind sideways for a long time…
Entry and Exit Strategies
Entries: Each chart posted includes the TrendVue High/Low indicator in the chart legend, showing the high and low of the prior day. We refer to these values frequently for setting stops, alerts and initial protective stops.
Our trade entry methodology stresses that price should prove to us where it wants to go, consequently all of our setups involve placing entry stop/stop limit orders where a trade will be initiated for us automatically, if price is able to move in the expected direction.
When price does not comply, we evaluate the setup to determine if it is either a) an expanding pattern or b) an invalidated setup. For example, a 3 bar bull flag setup that does not trigger can be followed up the next day with a buy stop above the new 4th bar, provided that price doesn’t invalidate the bull flag pattern.
Exits: Once in a trade, we must place an initial protective stop as soon as possible. Consider this stop your crash stop – an emergency measure which you hope will never get used, but is there for your protection in case you lose all connectivity to your broker or some other unforeseen event takes place. The initial protective stop, unless noted otherwise, is always at the opposite end of the bar used to trigger a trade.
For example, if our trade setup for a long trade is based upon a break of yesterday’s high, we will use yesterday’s low as our initial protective stop.
The next task for us, once in a trade, is to find the earliest reasonable opportunity to move stops up. Trade and risk management is a highly personal topic; we can only relate to what works for us. In general, once a trade is substantially profitable, or has started to trend on a 10 or 20 minute chart intraday, I move to a break-even stop immediately.
Once the trade has survived its first day, we are already on watch to look for our profit exit. Here your personal objectives come into play. A longer-term investor using swing trading techniques to improve entry and exit will tend to give a trade some room. Our recommendation is to use the break even stop until the stock starts to trend (higher highs, higher lows or the reverse in a down trend).
Short term swing traders will tend to use price extension estimates and pre-place exit orders at these estimates. This discussion goes beyond the scope of our daily swing trade service, however we are happy to entertain questions in TrendVue Trader Talk on any subject.
Long Setups
General common strategy: Unless noted otherwise, buy stop just above the “high” value, with an initial protective stop at the low value of the bar, not below the bar.
Retracement or Pause in Up Swing / Up Trend
WEN – has had a very long run here – if filled at 2 day high + 0.02 or on an intraday pattern demand this one clear the 3 day high and hold relatively strong at the close.
LOW – home products/building supplies – see also MAS in Special Situations
Test of Top – Continuation
Short Setups
General common strategy: Unless noted otherwise, place a sell alert at or just below the low of the setup bar, and look for the first failed intraday bounce after the low has been broken. What we are looking for is price to push down, bounce a little, and fail again – this is where we want to get short.
Retracement or Pause in Down Swing / Down Trend
X – steel
NUE – steel
ADSK – software
RIM:C / RIMM – if weakness returns look to find an intraday entry and hold only if price closes under the trigger value and strongly in favour of the trade. I don’t generally hold RIMM short more than 1–2 days; it travels enough intraday to deliver nice gains and I like to sleep at night.
Test of Bottom – Continuation
AL – high energy prices are a double whammy for Aluminum producers, increasing electricity costs as well. Also AA could be watched here for sector decline.
Special Situations
QCOM – LONG – offers a triangle breakout/pullback pair of candles here – one day only stalk long side.
MAS – building supplies – LONG – piercing line and a good-enough gap fill.
Today's transcript.
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Wednesday July 6 closing data
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Statistics for Wednesday July 6, 2005
Note: Statistics are compiled based on our custom symbol universe of the most heavily traded stocks.
| Symbols in Up Swings | 449 |
|---|---|
| Symbols in Down Swings | 293 |
| Up/Down Swing Ratio | 1.53 : 1 |
| Advancers | 33% |
| Decliners | 65% |
| Unchanged | 2% |
| Up Bars | 48% |
| Down Bars | 22% |
| Inside Bars | 19% |
| Outside Bars | 6% |
| Close > 20EMA | 33% |
| Close > 50SMA | 65% |
| Close > 200SMA | 57% |
| 20EMA > 50SMA > 200SMA (trend up) | 42% |
| 20EMA < 50SMA < 200SMA (trend down) | 20% |