Indexes In Demand – 25 June 2014

There’s been a lot of hoopla about the sell-off yesterday. It is important to keep perspective and watch supply and demand levels. To me, the indexes still look strong, in fact, they sold off right into demand. Until demand is broken, I’mm still bullish and a buyer.

DIA - Daily - 25 July 2014
DIA – Daily – 25 July 2014
IWM - Daily - 25 July 2014
IWM – Daily – 25 July 2014
SPY - Daily - 25 July 2014
SPY – Daily – 25 July 2014

Biotech – 22 June 2014

Looking at the weekend charts, there are two sectors that initially stand out to me, biotech ($IBB) and healthcare ($XLV).
Focusing on biotech for now, the $IBB ETF had a lovely day of Friday breaking out from a multi-day base.

IBB - Daily - 22 June 2014
IBB – Daily – 22 June 2014

I’ll be keeping my eye on a number of biotech names this week looking for entries. The charts I like most are

  • $AEGR
  • $ALXN
  • $AMGN
  • $BIIB
  • $BMRN
  • $ILMN
  • $NPSP
  • $SGEN

I already have long positions in $BIIB, $NPSP & $SGEN.

Market Thoughts – 1 June 2014

Spending some quiet time looking at the markets while they are closed often provides some much needed perspective. The indexes were strong this week, and it looks like they are ready for another leg up. I like to look at the sectors to see if there are any trading opportunities, or just anything that stands out that will give me a clue as to where to turn my attention during the week.

Starting with the $XLF which broke out of a consolidation pattern and is just holding there.

XLF - Daily - 1 June 2014
XLF – Daily – 1 June 2014

Full disclosure, I am short $XLF as well as $JPM. I faded the move out, and will be watching for a break of last weeks high or low either way.

Consumer staples ($XLP) broke out nicely this week. I see no immediate trading opportunity in the index, but I will be looking for opportunities in individual stocks in the sector.

XLP - Daily - 1 June 2014
XLP – Daily – 1 June 2014

 

Healthcare ($XLV) is another strong one, breaking out of an ascending triangle.

XLV - 180 Minute - 1 June 2014
XLV – 180 Minute – 1 June 2014

I will be looking to get long on a retest of that breakout.

The retail sector ($XRT) is a very interesting one to me. It has been relatively weak the past month, the weakest of the sectors that I watch in fact. I am interesting in the short side due to this relative weakness, and am eatching the 84.50 level. It is a nice bull trap trade – breaking out above 84 right into supply.

XRT - 60 Minute - 1 June 2014
XRT – 60 Minute – 1 June 2014

My target is 81 on this one, but I’ll leave a trailer for the possibility of retesting the 78 level.

Biotech ($IBB) is another good looking chart. It broke out of an ascending triangle, and the next stop to me looks like the highs near 280.

IBB - Daily - 1 June 2014
IBB – Daily – 1 June 2014

I am looking at the smaller timeframes for an entry, and like the 236 level.

Homebuilders ($XHB) has made a new swing high, so I like the look of the long. I am looking at 31 for my entry, a nice base just above the low, again looking for a retest of the highs.

XHB - Daily - 1 June 2014
XHB – Daily – 1 June 2014

That’s everything that I am watching right now, lets see how those pan out this week. It is important to be patient right now as we are in summer trading.