Day Trading Lessons

Watchlist for 2/2/15 & Market Commentary

February 2, 2015

Red Alert!

I don't like the look of the SPY right here. If that 200DMA breaks, it could get ugly. In this environment, you need to be especially diligent in executing your stops. Last week we failed to break out of the triangle and just managed to set a lower high before coming back to tap support for a fourth time. That 196 area is of interest because if it breaks down the SPY could see the October lows again.

XIV's not looking too good. Stay away from this one for a while. I think we could be entering a period of choppy volatility and prolonged backwardation on the futures. Have a look at the chart below showing what the performance of XIV would have been like in 2007. I wouldn't be long this instrument again until we get a good flush out of the fear and weak hands.

XIV
Source vixcontangooscillator.com

Despite my concern about the market in general, I still see plenty of bullish setups on individual stocks. I've been searching to short if the market does crack, but not finding any exceptionally juicy setups. Maybe that's why we are in such a chop zone.

The best big picture short I like is IBB. It's getting a little far from the 200DMA. If the uptrend breaks a lot of the hot biotechs could retrace some gains.

Watchlist

COMM - This is a little overextended. I like the short setup for a set back to 27, maybe 26's using 28.60 as a guide. I like the risk/reward here, but that's about it. It's a strong company so don't fight it if it continues trend.

ONCE - This was a very strong IPO. Possible continuation tomorrow.

AMZN - The Street seems to like Amazon again after the earnings beat. Nice gap up above resistance, I think this could make a NFLX-like move to 360 and possibly 380. Use 340 as a risk - treating it like a $35 stock running to $38..<div class="image-box">

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GIMO - Nice pop on earnings. Looking for an intraday ABCD for this to grind up to 20.

SYNA - 200 DMA support, possible breakaway gap to 80+.

BIIB - Another possible breakaway gap. Looking at ~415 upside target.

KLIC - Looks like this one is retesting the breakout area.

XOXO - Nice bearish setup for set back to 15's. Looking for it to come up and retest 16.75 and fail.


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