Trade Plan for Wednesday(SBUX, WIT, GLD)
Posted on August 24, 2010 by trader21 in *TODAY'S STOCK SETUPS, GLOBAL CHART ANALYSIS, Trading Plan
1. Market Action
2. Open Positions
3. New Setups
MARKET ACTION
Scanning the individual names in the major indices speaks volumes to us about the state of the market.
The Nasdaq 100 only has 23 stocks trading above their 50 day moving average and the S&P 500 has around only 25% of its own components trading above this level. Many of these stocks look to be crashing out on profit taking as well.
We have now broken the recent lows and look like we could be getting ready to test the July lows. If the July lows break we could see another collapse to new lows. The market still has a chance to right itself if it can show some strength on Wednesday but Tuesdays finish was a real big disappointment. We did see some bids step in and this buying push us off the early morning lows. We love playing these types of wash out moves when they reverse and close near the highs of the day but we went from a reversal off the lows to an accelerated move lower. We also closed at the lows on heavy volume. This is very, very bearish activity and normally precedes lower levels. The only thing we have going for us giving us hope of a market recovery is we have already been down 4 days in a row and we are near the previous low support levels. This could give us a relief rally in the next day or 2. At this rate this rally should be smacked back down on heavy volume at resistance levels.
OPEN POSITIONS
We were stopped out of WIT with about a 5% loss. If you were awhile enough you could have taken some profits in the first couple days of this trade as it ran nearly 4%.
We were also stopped out on SBUX at near breakeven after a run of over 21%. Profits should have obviously been booked along the way and there were many opportunities to close out the entire trade but we kept a portion of the position open just to let it run.
NEW SETUPS
We have no new setups due to market conditions.
BUY RULES
*We look to buy our setups when they break at least 10 cents above the prior days high. This gives us confirmation that the setup should continue higher and increases the odds of an explosive move. Depending on market conditions we will look to start taking profits on ½ position when we get a move of 3%-5%. We then move our stop to breakeven for the remaining position and let it run in hopes of massive gains.
Disclaimer:
Global Chart Analysis and www.betterstockentries.com (“Company”) is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. The analysts and employees or affiliates of Company may hold positions in the stocks, currencies or industries discussed here. You understand and acknowledge that there is a very high degree of risk involved in trading securities and/or currencies. The Company, the authors, the publisher, and all affiliates of Company assume no responsibility or liability for your trading and investment results. Factual statements on the Company’s website, or in its publications, are made as of the date stated and are subject to change without notice.
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results of any individual trader or trading system published by Company are not indicative of future returns by that trader or system, and are not indicative of future returns which be realized by you. In addition, the indicators, strategies, columns, articles and all other features of Company’s products (collectively, the “Information”) are provided for informational and educational purposes only and should not be construed as investment advice. Examples presented on Company’s website are for educational purposes only. Such set-ups are not solicitations of any order to buy or sell. Accordingly, you should not rely solely on the Information in making any investment. Rather, you should use the Information only as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment.
Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading and may not be impacted by brokerage and other slippage fees. Also, since the trades have not actually been executed, the results may have under- or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.
www.betterstockentries.com
603 S. Prospect Ave
Redondo Beach, CA 90277
