Tickers Discussed: AAPL, AMZN, FB, GOOGL, XLB, XLC, XLE, XLF, XLI, XLK, XLV, XLY
This blog provides the key locations to place sell -side alarms on the SPDR Sectors and other marquis names. For each set up, I give you levels to alarm for entry, potential targets, and other key information to glean from the charts.
Creating a Plan if the Market rolls over
So with the softness in AAPL and AMZN, combined with the broad market indexes at the top of the recent rally and at tough resistance, I though it would be a good idea to identify the key levels that seed to hold to keep the rally in tact. I recommend going through the chart and setting yourself some sell alarms at these key locations for these important names. There are some big gaps below GOOGL, FB and AMZN that would cause a pretty swift downdraft should they fill. These gaps are also fantastic money making opportunities if you are ready to pounce when the alarms fire.
Take a look, set your alarms, and have a plan for tomorrow or when ever these trip wires go off. XLK, XLY, and XLV have been standout winners over this rally. If you see these key sectors losing support, be proactive with your holdings because if these leaders rollover, you can be sure other sectors will be following.
Hope it helps.
Trades about to Happen
The key locations are marked along with commentary are in the annotations. Click the charts to expand them.
Price trading at around $288 in after hours trade. To my eye, $285 is your go / no go level. Under $285 sends price lower IMO. It’s a key level.
A big gap below that needs to get filled at some point. In after hours trade price stopped almost right on the gap support near $2330. Any further selling tomorrow will put price firmly into the gap with the possibility of a gap fill nearly $300 lower.
FB 60 min
Nice sized gap below $202. There’s a good chance this back fills if they go after mega-cap tech even though $FB reported a nice quarter.
GOOGL 60 min
Price Tested the top of the gap all day today but held. Like the others, it all depends on if traders go after the big-cap tech names. If they do, be ready. A $90 gap isn’t chicken feed.
SPDR Sector Review
I didn’t get them all but to me the offensive sectors are the important ones to watch. XLC, XLF, XLK, XLY, XLV. If the sell alarms trip on these important sectors raise your antennae. Tough for the market to continue its advance if these offensive sectors stumble. The other sectors covered, XLE, XLB, XLI won’t move the market needle regardless of what they do. That said, some nice trading opportunities will present themselves if the alarms trigger.
Follow the annotations on the chart.
XLB 60 min
XLC 60 min
XLE 60 min
XLF 60 min
XLI 60 min
XLK 60 min.
XLV 60 min
XLY 60 min
Pulling it all together
I like to anticipate multiple scenarios when trading. I think running through those possibilities lower the risk of being totally blindsided. So in this case, I’ll set a bunch of alarms on the names above plus a bunch of others I closely follow. And then I will be patient and wait. If they never trigger, no harm no foul. If however they do trigger I will know exactly where not only where my targets are, but also will give me a good sense whether a market turn is upon us. If the market posture shifts, I will shift focus to looking for short set ups instead of long set ups.
While we are on the topic of long set ups. I published a blog post yesterday that featured 8 trade ideas…. 7 long ideas and 1 short idea. Yesterday the market posture was undeniably bullish. There was no evidence pointing toward short set ups. If were were up 2% today instead of down, many of those set ups would have triggered. THe fact that they did not trigger today actually provided valuable information. Some key support levels that should have held, failed today. One of the key signs of a reversal forming is when bullish set ups no longer work or never trigger. Remember that. When what you expect to happen doesn’t, it’s a heads up that something is changing. You’ll need more evidence to confirm a trend change, but at least you’ll start looking in the right places.
Good Luck, hope it helps.
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