Trading Journal 4/30/14

Today both the Dow and S&P 500 closed just off their all time highs after some intraday volatility while the Nasdaq 100 continues to grind higher with the support of the 10 day SMA below. The Russell 2000 continues to put in bottoming tails above the April low, but remains below a falling 30 day SMA and flattening 150 day SMA. Ultimately, the 200 day SMA remains support below, but the longer this weakness continues the more difficult it will be to play catch up later on. I do believe we are in the process of forming a base of support in the Russell 2000 which will eventually allow it to move higher, but for now large caps and late cycle/defensive sectors continue outperform. Global equity markets were mixed with a bias to the upside for the day. Leaders to the downside included South Korea (EWY), and Taiwan (EWT), while leaders to the upside included Greece (GREK), Norway (ENOR), and Peru (EPU). Bonds (TLT) continue to consolidate between 109.50-111.50 above a rising 30 day SMA and are showing relative strength that suggests further upside. It feels like large caps want new highs in the coming days while tech starts to find some footing and small caps build a base of support. There are opportunities on both the long and short side depending on the sector/industry you are trading.

Leaders to the upside included telecom services (VOX), basic materials (XLB), solar stocks (TAN), oil services (PXJ), transports (IYT), small caps (IWM), and industrials (XLI).

Laggards on the day included social stocks (SOCL), gold miners (GDX), steel stocks (SLX), telecom (XTL), energy (XLE), gaming stocks (BJK), and healthcare (XLV).

Gold continues to build above 1275-1280 support to give the 10/30 day SMA’s time to flatten out and eventually provide support below. R/R still favors the upside but resistance at 1306.
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Sectors Showing Relative Strength

XLB, the basic materials sector, has been holding up well as it consolidates above rising weekly moving averages near its YTD highs while the major indices struggle to find traction. This sector should continue to perform well as it normally does in a mid to late cycle bull market and should benefit from the out-performance of large caps that we've been seeing.

XLB, the basic materials sector, has been holding up well as it consolidates above rising weekly moving averages near its YTD highs while the major indices struggle to find traction. This sector should continue to perform well as it normally does in a mid to late cycle bull market and should benefit from the out-performance of large caps that we’ve been seeing.

KOL, the coal sector ETF, has worked on putting in a bottom above the support of last years lows around the $17 level. We are seeing a double bottom around this level with the weekly moving averages have flattened and now rising to provide support below price. In addition, we are seeing a positive momentum divergence in RSI. The relative strength in the basic materials and coal sector continue despite volatility in the broader market and both of these ETFs should see moves higher in the intermediate term. In addition, stops are well defined below support depending on your time frame.

KOL, the coal sector ETF, has worked on putting in a bottom above the support of last years lows around the $17 level. We are seeing a double bottom around this level with the weekly moving averages have flattened and now rising to provide support below price. In addition, we are seeing a positive momentum divergence in RSI. The relative strength in the basic materials and coal sector continue despite volatility in the broader market and both of these ETFs should see moves higher in the intermediate term. In addition, stops are well defined below support depending on your time frame.


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Trading Journal 4/29/14

Today the major indices continued to build above yesterday’s bottoming tail and rising 10 day SMA. The Russell 2000 continues to remain the weakest of the major indices closing below its 10/30/150 day SMAs. Global equity markets were broadly to the upside with Australia (EWA) being the laggard closing down 70 basis points. Bonds (TLT) closed below the 10 day SMA but continues to build an upper level base above support at 109.50. OVerall, the bias in the major indices remains neutral/higher as we are above the rising 10 day SMA, but the weakness in small caps remains a concern. In addition, the increase in volatility (intraday range) continues to support a bottom forming above the month to date lows.

Leaders to the upside included large cap biotech (IBB), social stocks (SOCL), telecom (XTL), coal stocks (KOL), gold miners (GDX), aerospace & defense names (PPA), and energy (XLE).

Laggards on the day included regional banks (KRE), consumer staples (XLP), utilities (XLU), homebuilders (XHB), real estate index (IYR), agriculture names (MOO), and solar stocks (TAN).

In the commodity space, copper failing to build a base below resistance at 3.12, but closed down 5 cents on the day at its rising 10 day SMA which should provide support, if not the next level is 2.99.
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Trading Journal 4/28/14

Today the major indices saw significant intraday volatility creating a wide range intraday only to push off the lows aggressively mid-way through the trading session. Large caps continue to outperform small caps and technology as the rotation into late cycle and defensive names continues. Global equity markets were mixed on the day with Russia (RSX) leading to the upside 4% and Greece (GREK) leading to the downside 1.72%. Bonds continue to build a base above a rising 10 and 30 day SMA after experiencing a gap down and follow through from Friday’s gravestone doji candle. Overall, US equities continue to build above the prior pivot low as volatility and volumes pick up in the major indices.

Leaders to the upside included consumer staples (XLP), retail (XRT), healthcare (XLB), real estate index (IYR), utilities (XLU), telecom services (VOX) and agriculture names (MOO).

Leaders to the downside included solar stocks (TAN), social stocks (SOCL), gold mners (GDX), gaming stocks (BJK), telecom (XTL), and regional banks (KRE).
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Trading Journal 4/25/14

The broader markets failed to hold their upper level bases and broke back down below their key short term moving averages with tech and small caps leading to the downside. Volume picked up but was still below average as we continue to see large caps outperform. Global equity markets moved broadly to the downside though Vietnam (VNM) closed up 1.7% on the day. Bonds made new intraday highs put in a topping tail but remain above their 10 and 30 day SMA so the bias remains to the upside. Overall, the equity markets remain vulnerable after failing to build an upper level base after an aggressive move off the recent lows. We continue to see sector rotation out of the momentum names into energy, utilities, and materials which is indicative of a late cycle bull market.

Leaders to the upside included gold miners (GDX), utilities (XLU), oil service names (OIH), consumer staples (XLP), agricultural names (MOO), and the real estate index (IYR).

Laggards included social names (SOCL), semiconductors (SMH), solar stocks (TAN), large cap biotech (IBB), gaming stocks (BJK), homebuilders (XHB), and small caps (IWM).
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