Swing trading analysis methods transcript

1. Good day traders and welcome to the Premium Newsletter for June 4, 2013.

2. Let’s start off with the fundamentals and go from there. It’s been a very interesting time for the market last few weeks I have to say. Two reports came out this morning before the bell. The first report was home prices. The report was very positive claiming almost 12 percent more home sales over one year ago. That’s one of the largest increases since 2006.

3. If you recall early last week or late the week before I provided some guidance for going long the home building sector and one stock I suggest you look at once again is KB homes. The stock is going to continue moving up and I strongly suggest keeping an eye on it for future setups.

4. The next report that was released was trade deficit. The U.S. trade deficit widened in April, as demand for foreign cars, cell phones and other imported goods outpaced growth in U.S. exports. A wider trade gap can restrain growth because it means U.S. consumers and businesses are spending more on foreign goods than U.S. companies are taking in from overseas sales.

5. Technically the stock market interprets the mixed news with a slight bullish bias. As I predicted yesterday that the market was going to hit the next resistance level and it did just that within a few ticks. The market backed off as I also thought it would because internals are weakening and more selling pressure is coming into the market.

6. The RSI is currently in a fairly neutral area and not nearly as overbought as it was a few weeks ago.

7. The 10 year bond futures contract traded lower today. This is detrimental to the stock market because it shows fear that interest rates will be rising soon. Remember the 10 year futures is inverse to the yield so the lower the 10 year bond trades, the higher interest rates will go.

8. Looking at our existing positions, we are short PFE and the stock looks like it’s beginning to lose steam once again. We were very close to our exit level but the stock rallied due to positive news from rival Merck. These associated rallies typically last only a few days before the stock reverts back to it’s trend.

9. The second stock we are holding is MGA and the stock is holding up superbly in light of the financial markets including the U.S. stock market.

10. There is a new signal and it’s an inside day trade. I attached some instructions on inside day trades for your review in the premium newsletter today with the video. The stock is Polaris Industries, the company designs, engineers and manufactures snowmobiles, all terrain vehicles, motorcycles and personal watercraft. The industry has been moving up since beginning of the year and this is probably the strongest stock in that sector. Notice how well it held up during the last two week correction in the stock market. If the stock trades above the high that was made today I would recommend going long on a stop at 96.70. If filled place a sell stop at 94.70 if you are filled. Do not trade large positions in this market because the upside is rather limited right now due to the underlying market conditions.

11. That’s it for today’s update. I will update you tomorrow morning. And remember everyone is waiting for Friday’s report so the market is going to be trading with light volume till that time.

Have a great evening everyone. http://www.marketgeeks.com