NFTRH+; Short Setups

This post is mailed to all subscribers since it also works as a general view of the broad US stock market.  Just ignore the trading talk and consider the bull/bear parameters. 

Let’s use SPY as the general marker for the stock bounce and review it, along with a couple of specific sectors for bounce parameters.  As noted in a public post yesterday, I covered all short positions due to what I thought would be an oncoming bounce attempt; and here it is.

Side note:  I will not disturb subscribers with emails about minute details of my sometimes faulty trading, but a post like the one linked above can be used to dovetail with our more important work if you’d like to monitor the site, including its public posts.  You can sign up (right sidebar) to get all posts emailed, or use RSS, Feedly, etc.

In this post this morning we reviewed the SPX and projected the EMAs 10 & 20 as key bounce parameters and looked ahead to the potential of a new decline to the 2260-2280 region.  As for SPY, which I am considering shorting, it is already to the EMA 20.  If you think the market is going to resume a correction, this is a spot to begin shorting it (with a stop loss above 236 to suit individual risk tolerance, but a rise above 238 and the March high would really hurt the bear case).


The Financials could find resistance at the SMA 50 and/or the EMAs 10 & 20, which are dropping toward it.  24 to 24.25 looks like the short area (if you think interest rates will resume declining) * and a stop loss above 24.75 would be a good idea.


SMH on the other hand, is not something I am interested in being short against anymore.  Indeed, I was lucky to get out of the previous short on the big down day with only a very limited loss.  It holds the EMAs 10 & 20.  I want to look at items with relative technical damage and hence, shorting parameters, like the Financials and even SPY above.


* In a side note, I added very short-term positions in Treasury bond short fund TMV as protection for my still-held TLT positions.  The idea on the short-term is to cancel out price moves but still keep TLT for its dividend distributions and risk ‘off’ characteristic.

A reminder that chart based NFTRH+ updates are technical trade setup ideas, which may not be revisited as the buy, sell, stop parameters are already noted. They are meant as a starting point for further research if interested. I will not personally buy every item highlighted and will sometimes sell – without prior notice (because this takes time and resource away from NFTRH’s main functions) – any item that I do buy, below target, which is something I often do as a trader. Also please be aware that I am not a fundamental stock analyst. Due diligence is your responsibility.