Thursday, August 11, 2005
Issue Contents:
| 09:19 | Swing Trade Setups Featured charts for Thursday August 11 |
| 16:15 | TrendVue Trader Talk Today's transcript. |
| 17:32 | Swing Scanner Results Thursday August 11 closing data |
| 17:34 | Market Statistics For Thursday August 11, 2005 |
Featured setups from Wednesday August 10, 2005 closing data symbol scan
Jump to: Long Setups | Short Setups | Special Situations
Notes for the Day
- few decent looking long opportunities out there; energy has already moved up (though a “caboose” entry may still be possible here, if the sector can manage to rise again); and most of our coverage universe has set up bearish patterns that are difficult to buy. We aren’t bearish… we just interpret… but charts are swinging increasingly so.
- If a surprise rally does show up I’ll use ETF’s for exposure unless other ideas show up during the day.
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.
Test of Top – Continuation
THC – healthcare
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
Home Builders
The group all have similar charts. Many shorts have been roasted predicting the end of the housing sector – now over the past week there’s a hint of the end to be sure. Sector may form a right hand shoulder yet on a bigger bounce but worth stalking short with tight stops today and for 1 – 2 more days.
LEN
TOL
DHI
YELL – trucking – bear flag forming. Follow up 1 more day only.
YELL – monthly chart for some perspective. Had a good run, may just need a decent pull back. But there’s that energy thing….
IRF – semis – bounce to overhead resistance should be stalked
CBT – tech
Special Situations
PFE – stalk long side – while PFE certainly could head lower traditionally the drug sector gets supported better when markets are overall weak. We can see a descending triangle pattern which poked above the trendline yesterday – stalk a long near yesterday’s open / the two day high IF price can come back up through the trendline again. Good for one day only, two if today’s range is narrow.
Today's transcript.
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Thursday August 11 closing data
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Statistics for Thursday August 11, 2005
Our custom symbol universe of the most heavily traded or liquid US stocks is used as the base for analysis.
| Symbols in Up Swings | 386 |
|---|---|
| Symbols in Down Swings | 299 |
| Up/Down Swing Ratio | 1.29 : 1 |
| Advancers | 73% |
| Decliners | 25% |
| Unchanged | 1% |
| Up Bars | 32% |
| Down Bars | 39% |
| Inside Bars | 20% |
| Outside Bars | 4% |
| Close > 20EMA | 73% |
| Close > 50SMA | 64% |
| Close > 200SMA | 68% |
| 20EMA > 50SMA > 200SMA (trend up) | 44% |
| 20EMA < 50SMA < 200SMA (trend down) | 19% |