Monday, October 22, 2012

Monday evening

SPX Daily
I've got a friend in town and I'm not trading much. S&P futures have rallied back up to the 50day on SPX. If the selling is going to continue, it should start back up tonight / tomorrow. I just put on a swing short in S&P futures at 1432... stop is set a little above 1442ish. I'm looking for 1395-1405 as a target in the next few days. The 20day WMA on S&P futures is currently 1438ish.

Monday afternoon


Gimme a dollar ...

DLTR Weekly Chart

DLTR Daily Chart

DLTR 5 Minute Chart (10/19/2012)
Today I'm looking at Dollar Tree for a trade to the upside.  If you saw FM Halftime on Friday you may have seen DrJ call this one as his final trade.  Just so you know, Fitz says stay away.  I say, this one has potential and here's why.

Looking at the weekly chart ... that's scary.  Nothin' but air below that nasty string of red candles.  The daily chart isn't much better either.   Still no sign of support and the single green candle last week was a gravestone doji.  (The stock opened at the previous close of 40.52 and closed at exactly the same price.  It traded up during the day so Worden awarded a green candle.)

Here is the glimmer of hope that has me looking at DLTR.  Note on the 5 minute chart the low of the day was made in the first candle.  While you can't see it I'll also tell you it was the tallest candle that printed on that chart.  The low was 38.77.  The long deep red candle on the weekly and daily charts had a low of 38.40.  Some may say it means nothing but I think it's important and traders will notice.  While the stock is still moving down on above average volume that volume has been diminishing.

The Trade
Look for a day that the close is higher than the open.  If today looks like it will meet this criterion then you could take a small bite late in the day.  I would use 38.29 as the stop for this initial buy and if it's violated I would be out of the trade.  (This is 11 cents below that magic 38.40 low.)  I would add to the position carefully and use a higher stop for each add.  Just about every buy in 2012 was above the level of the trade entry so there is plenty of resistance.  Don't expect a fast move higher (but it could) as lots of folks would like to get their money back.