Trading Experts Weekly Shake Down

Trading Experts

TE Shakedown 7/2/17

Holiday shortened week approaching with the market closed Tuesday & a half day Monday -- which will lead to a very low volume week in the market. We are coming off a very difficult week for traders as the broad market seemed confused as it works on an intermediate 'top'. Monday it looked like we were going to break out of the consolidation higher, only to trap traders with a Tuesday sell-off. Wednesday gave us a gap up with a strong move to the upside -- so Tuesday was just a fake out lower right? Well Thursday the market got smoked. 

Last week I talked about how wide & sloppy action at highs is usually smart money unwinding their positions --- and this week looked to prove that theory correct. It is very normal for stocks to show relative strength in some sectors as money rotates. It is NOT very normal for that rotation to be happening daily with sectors having no 'memory' from day to day. It's very important to listen to the signals the market is giving you so you can capitalize when it's 'easy' and refrain from over trading when it is choppy and 'difficult.'

These cues have me in much more of a 'hands-off' mode. I will be staying light and being much more selective until we get some good earnings setups mid-July. 

Let's take a look at some sectors/indices

Onto some charts!

Actionable Charts

Trade of the Week: STLD Long

STLD is one beautiful chart. It is a gorgeous bull flag on the daily chart that perfectly coincides with a huuuge weekly Cup & Handle. Look to enter this one on a high volume break of $36.50 but the true confirmation will be through $37. I would love if this chilled for a few days and consolidated underneath the huge level, but we'll see.

Trigger: $36.50

Stop: $34.99

Target: $43+

I will continue to be pretty hands off this week knowing that there will be low volume because of the holiday shortened week. That being said, there's always a ton of opportunity out there.

See you in the chat Monday.