$GOOGL Break Out

Chart Courtesy of StockCharts.com

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$GOOGL has broken out above the 200 day. This is a viable option to buy with correct position sizing with a stop loss placed at a close below the 200 day. Options in $GOOGL are also liquid, giving the trader a way to cap their risks at only the cost of the contract. This is a rare opportunity in $GOOGL: a momentum buy signal after a long sell off and trading range.

My February $TQQQ Trade

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My February $TQQQ Trade

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  1.  I entered $TQQQ at $97.19 on February 10th in the morning after the gap and go break out over the 50 day sma. This was a momentum buy signal crossing the 50 day, the 5 day ema, and it was a gap up over the previous day’s close.
  2. My initial stop was a close below the 50 day sma, but as the trend began, I moved my stop to  a close below each day’s previous low of day. My stop was not triggered, and I held the trade for the next 12 trading days.
  3. As the 70 RSI was reached, momentum stopped and $TQQQ settled into a trading range in overbought territory.
  4. $TQQQ’s major component, $AAPL, also began to reverse with multiple down days.
  5. On February 26th $TQQQ violated its 5 day ema, while being overbought, and losing momentum. I exited for a nice profit of $13.46 increase per share and a 13.8% return on capital at risk in 12 days.

10 Facts About the $SPY Chart

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10 Fast Facts About the $SPY Chart

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  1. The long term uptrend is still in place.
  2. $SPY is within striking distance of all time highs.
  3. The RSI still gives it room to run up.
  4. $SPY closed below the 5 day ema. Momentum is waning.
  5. The MACD is close to a bearish crossover.
  6. Near term support is at the previous closing all time high  high around $209.
  7. $SPY was rejected from the overbought RSI level over 65.
  8. Three days of lower lows and lower highs is the first sign of a pullback.
  9. The 50 RSI may converge with the $209 levels this week setting up the first possible dip buying opportunity.
  10. The best odds here is still in buying the right dip. We have the two trend lines and the 50 day sma to watch next week if it gets there.

 

7 Reasons I Exited My Long Positions

I have been aggressively long the $SPY and $QQQ using leveraged ETFs since they both broke above the 50 day sma. I also took $IWM long at the break out to all time highs. I have been holding $SPXL $TQQQ $TNA & $SPY for great returns on capital in February. I am still very bullish on equities but as a swing trader of the long term trend.

Here are the seven reasons I went to cash in my trading account this morning.

  1. As stock indexes have entered the 65-70 RSI reading they have lost momentum. Each day is now a struggle to go from red to green.
  2. After the run off the lows the risk/reward is now becoming skewed against long positions. There is more risk at these price levels than reward.
  3. The odds are that there will be a chance to get in on a pull back for a better entry and cost basis.
  4. Apple is now back below the 70 RSI and this was the third day of $AAPL setting a lower high and a lower low. These are the first signs of a potential trend reversal or trading range developing as the up trend fades. This effects $QQQ negatively.
  5. $SPY set a lower high and a lower low. It lost the 5 day ema in the morning and had trouble getting back to green. This is the second day of a red candle. $SPY has gone virtually nowhere since Monday.
  6. $SPY & $DIA stayed red while $IWM and $QQQ rallied. This is a divergence that will have to resolve itself and the odds are on down or sideways from here.
  7. The $VIX has stopped going down. Increasing volatility is a warning sign as the trading range expands.

I will be waiting to buy the dip but this slow motion grind upwards has become not worth the risk for such a limited upside to the 70 RSI if it gets there and the growing potential for a pull back.

$SPY Chart Facts – 2/22/15

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  1.  All time highs have been held through all the Greece headlines, this is bullish so far.
  2. The old all time high at $209 will be our first level of support as people that missed the breakout will likely be waiting there for a second chance to get in.
  3. The previous all time at $207 could provide the next line of support.
  4. Last week was a great week for price consolidation with the $208.75 support and $211.33 resistance levels forming a trading range. This type of action helps build a price base for the uptrend to continue.
  5. With a 2.77% year to date return $SPY is hardly in a parabolic or over extended move this year. It has room to lock in more gains.
  6. The MACD is still giving a bullish momentum signal.
  7. RSI at 65.13 gives spy room for more upside before being overbought.
  8. Friday had healthy volume on the move up.
  9. The $SPY had little trouble shaking off bad news and all the Greek fears over the past week. This is bullish.
  10. My positions since the break over the 50 day has been $SPXL $TQQQ $TNA and $SPY my stop is a close below the previous days low to show me a sign of a loss of accumulation in my time frame. I will be looking to take profits over the 70 RSI as my target.