Early Bird Report 5-30-12
Early Bird Report5-30-12
Sizeable gap down this a.m in the SPY’s on, you guessed it, worries over Spain and Europe. Its no fun to have to navigate these Euro headlines, but it is what it is. We had staged a nice bounce recently off the 130 pivot lows in the SPY’s, so some give back shouldn’t be unexpected or overly worrisome for bulls. In fact, it is on gap down days like this, where we can really see what this latest rally is made of…a gap fill would be pretty impressive. 131.78 are lows we made last Friday, I’d watch that area as a first line of defense if we crack lower on the open. Below there, its a little harder to pick real support…I suppose 131.42 lows from last Thursday could be monitored. If we start to trade below those levels, however, I think we start to get pulled back like a magnet for a retest of the 130 area.
News/Earnings Stocks (as of 7:30 a.m. CT publication)
Gapping Up– FORM TFM OSIR MON DGIT NEON
Gapping Down —RIMM PWRD SURG ITRN DRYS CPRT
No indication — ALNY JOSB HBI YGE FINL BAH TEA PEG
Watchlist: This is a breakdown of stocks w/ certain technical characteristics in light of yesterday’s action, NOT a recommendation to Buy or Sell. Always consult your own registered broker/advisor before initiating any positions.
Under $10 range break long momentum looks with strong closes/actionable charts: IN HW AUTH RMBS OTT MVIS SNTS XOMA SNSS DATE
Over $10 long looks w/ strong closes/actionable charts coming out of a range: NTES PENN SLXP CVS LKQ EQIX LII TWTC DSW BBBY SYNC SWI MLNX LVS WYNN SFLY
Weak close/weak chart/downside range break: CALL STX BAX TEVA RATE MHP WDC
Pocket Pullback (3-5 day orderly pullback from strong trend): GEO
Up to 200d: UHS LM MPC HRB
Up to 50d: CMCSK FR GE GT DISCA CSTR HBI SLE FCS M CBS A DGX
Up to 20d: SYK PFG BRY BLL APH ADI SFLY MCO SIMO
Down to 20d
Down to 50d:
Down to 200d:
Current Positions in our Ditto Trade Mirrored Swing Account:
Long DDD from 22.05 (1/4 of original position. Sold 1/2 at 26.90 and stopped out of 1/4 at 30.76).
Long WYNN from 105.53
4 ideas for today’s trading day:
These are ideas…. NOT recommendations. The idea behind this section of the report is to illustrate my thought process when looking at potential swing and day trades. Often times I trade these setups, many times I don’t…dictated by market tone for that day. Complement these ideas with your ownresearch before making any trading decisions. Always consult your own registered broker/advisor before initiating any positions.
1.) Breakout long: PENN
Casino name has been coiling up here underneath 52 week highs for the better part of the month, and could get a pop if it is able to break out convincingly past the46/46.50 area.
2.) Small cap / Sub $10 long: HW
Nice move out to 52 week highs yesterday on heavy relative volume. Follow through may be tough today, especially as the market is gapping down, but its worth watching today to see if it gets some follow through. Rather than chase it on the open, may look for a pullback toward 4.50 on the open for an entry.
3.) Pullback short: CSTR // M
Again, not many long pullback ideas out there are interesting to me, as they would have had to have been pulling back as the market was trying to bounce off near term lows, which is a red flag. CSTR and M look like a decent r/r short ideas to sell into strenghth, however, as they both have bounced sharply up to their 50d Moving Averages. Unfortunately, it looks as though we will be gapping down quite a bit today, so getting an entry near those averages may be tough. I won’t chase either on a gap down, but if they find a way to pop up early in the session, I’ll consider a fade. If they are bumping up toward those areas later in the session, I’ll likely ignore them both.
4.) Traditional short: MHP
Ugly day yesterday, as it tried to gap higher, and was sold off early, filling the gap. Couldn’t recover later with the rest of the market, and wound up closing on lows. Looking at the daily chart, it hasn’t been able to bounce materially off that 200d with the market and now it looks like it will lose that support level. Not much in the way of support below. 44.40 is the target trigger area, and a move below May pivot lows of 44 would be confirmation.
The creation of this morning’s Early Bird Report was compiled while listening to the music of Grateful Dead