Tomorrow is options expiration and as usual, I will be taking the day off. Here are a couple charts that I am adding to the watchlist.

ILMN looks like it has hammered out a support area and is ready to move higher.
XING cleared this ascending triangle and may test it's 52 week high soon.

The Dow is mighty close to an all time high and you have to wonder how much strength bulls have left in them once they reach that mark. Be careful out there.

DT

I've been experimenting with a new daytrading style recently that is somewhere along the lines of the Maoxian dummy setups and Trader-X methodology. There are several bloggers trading these types of setups and this has proven to be a successful style, however, I've incorporated some of my own concepts and exit strategies to this style. The basic premise is to find stocks that are having a continuation of momentum after either gapping or opening strongly in either direction.

I've found Trade Ideas realtime scanner indispensable to my daytrading so that is where I started. I created a custom scan that basically looks for stocks breaking out of their opening range on volume. I added a few criteria such as a minimum gap, volume ratio, volatility, etc. I've been using the new Oddsmaker function to ensure that my strategy is profitable before spending energy trying to test it. Here is a screenshot of the Oddsmaker settings I am using to backtest. I ran this scan for the last 14 days and it returned 60.65% winners with the average winner larger then loser as well. While this is not true strategy testing, it at least gives you an idea if the alerts you are watching are working in your favor. I've seen Fallond and Dr.Brett experimenting with Oddsmaker as well, and I imagine that the tool will improve as it gains a larger following.

Here is an example of a trade I took today off an alert. I entered GROW on a break of the 4th bar and closed it out after the evening star pattern in the afternoon.
Here is the missed trade of the day. I've been experimenting with stop strategies and one of them is based on setting stops under the low of a 15 minute bar that makes a new closing high. I entered NTGR on the 3rd bar and was stopped out for a whopping 10 cent gain. With the futures dipping (shown by arrow on chart) I decided to hold off on re-entries and then lost track of NTGR. DOH!! Bad decision as this would of been a great and easy to manage trade. Still, this is just one example of several alerts that would of been nice trades, so I'm happy with the scan results.
Here are a few charts for tomorrow. With Options expiration on Friday, I will be cautious of entering any trade longer then a day or two.

Here is IIIN right up against resistance. It looks like commodities may get a technical bounce, and IIIN has already started to move. However, it is best to wait at least till mid-morning on this to see which way it breaks.
ASEI gapped over some resistance today and has a lot of shorts in pain right now. It fell short of taking out it's 50sma, but could follow through tomorrow.
BTJ got a nice bounce today with the rest of the Oil and Gas sector. It held on previous resistance which did in fact hold as support, so there is a chance that it holds this area as a bottom.

Thats all for tonight. If you're interested in trying Trade-Ideas, please sign up for a free demo here . If you want to know a little more about the software I also reviewed it here.

Good Luck,

DT

I'm still in vacation mode and trying to get back in synch with the markets. Congrats to those who have taken recent picks such as HAL, NTRI, CXW, INFA, etc. I am taking it light this week until I can get some time over the upcoming weekend to pore over my usual number of charts. Still I feel good that I was able to take some good trades today, especially on the daytrade side in tech stocks such as MRVL, RMBS, and RACK.

The bulls took over and squeezed the shorts today and had a strong day. All the indices closed near the highs of the days and were led by the Nasdaq and semiconductors. All of this bodes well for near term action, however, there are warning signs all over the place of an impending downturn in the intermediate timeframe.

I'm having problems with annotating my charts tonight so I will just post what is already saved.


Here is a chart of the Dow which looks like it will test it's 52 week highs in the coming days. There are a couple of clues to underlying weakness such as the still negative MACD histogram.
Same story for the SP500.
I posted this chart a few times warning of a possible top in commodities and it looks like a good time to revisit the chart. The CRB has fallen out of the bollinger bands after the clues of weakness given earlier. With the dollar possibly strengthening, it looks like commodities could be in for a cyclical bear market. The ratio charts under the chart have all broken support.
ORB looks like it is ready to move higher.
RACK was a nice daytrade today but it also looks like it can make a nice quick swing trade. This is still a stock in a downtrend with downsloping MA's, but we have some positive items as well such as a MACD and RSI divergence, and a nice candle pattern today. I held a few shares over from my daytrade and may add on weakness.
REDF is in a similar situation to RACK but may have a nice short term move.
BMC is trading tightly as it tries to break resistance. Keep an eye on it if the markets follow through tomorrow.

CTSH has been getting sold at this level, however, maybe the third breakout attempt is a charm.


Good Luck tomorrow,

DT