Sunday, March 3, 2013

Setting Up for An Interesting Week

What a week.  What a mess.  Trading last week was literally all over the place and we pretty much saw everything.  Gap ups, gap downs, reversals, late selloffs - you name it, it was present.  In terms of swing trading, the chaos made things very difficult, especially coming off of a very significant breakdown the previous week, but day-traders had to be loving it.  This year has been one where having a full-time has made things much more difficult than usual, at least for me.  Ugh.

Friday's session was especially active, and I think it will set the tone for what to expect for the rest of this week and going forward.  All the major indices had technical breakdowns on 2/20 and 2/21, but the fifty day moving averages have held so we are kind of in no-man's land as of now.  I think the market is a little confused here and the trading last week showed that.  I made some notes on the chart below and I am looking at the numbers listed as being very important.  A break above or below those levels should be significant. 

My market timing score has been at -1 for the past three sessions, which basically means the market has a slightly bearish outlook but that the best place to be is cash because the bears are not totally in control.  That's how I am looking at the week ahead.  I only have one long position going into next week and unless we get some clarity from the market early in the week, I will continue to find it hard to be aggressive either short or long.  I don't care which way we go, but right now, the problem is that we are not going anywhere. 

I have included some names I will be watching on both the long and short side of the market for the week ahead, along with the notes I made in TC2000 (which include trigger levels and average volume numbers).  I can't remember the last time I posted a bunch of short setups, but I did see some this weekend, so I have to go with it and watch them for possible triggers.  (Please click on the pictures below for a better view of each chart.)

Potential Long Setups

 Potential Short Setups with Notes
Charts and Notes from TC2000, Courtesy of Worden Brothers, Inc.

Overall, because of the volatility of last week, I will not be surprised if the bulls break us to new highs this week but also not shocked if the bears completely break this thing down.  More than likely, they continue to fight each other and the market chops around like it did last week, but we'll have to wait and see what happens.  Stay open-minded (ready to go on either side) but disciplined (don't force moves if the market isn't ready to go).   If the market does trade like it did last week, staying in cash or sticking to day-trades is the best option.  Good luck.

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