Ao minuto: Praças europeias respiram de alívio, indiferentes a possível violação de cessar-fogo

[Figas]

TradingMarkets.com
Mid-Week Battle Plan
Thursday July 24, 4:40 pm ET
By Larry Connors


Our primary trading encompasses the philosophy that markets move sectors, and sectors move stocks. Here are our thoughts for the day.
Markets

We are pretty extended to the downside on the VIX, and I imagine strong sell signals are on the way if we stretch a tad further (for the SPY). For now, we take a full NDX sell and a 1/2 SPY sell bias overnight. We will keep close stops in place in the event we are wrong.

Sectors and Stocks

Chemicals: The Chemicals have been acting wonderfully of late. The sector broke through the all important 200-period moving average in early May...moved up, pulled back, traded in a sideways range for roughly two weeks...and recently exploded higher. Everything appears to be fine on the daily chart with most recent highs taken out. A look at the weekly chart tells another story though. The longer-term picture shows a 'closer to overbought then oversold' outlook, and more importantly, we are now kissing the all-important 200-period moving average. Overbought into resistance is not a good time to initiate new positions. If you are long Chemical plays, now might be a good time to take a piece off the table, and lock in some solid gains. Overbought can easily become more overbought, and this is why we only take a piece off the table. Move the stop up to further lock in profits, and continue to trail the way up. This is simply good, smart trading.

Stocks to watch: (NYSEROHNews)



Aluminum: The Aluminum sector follows a similar path. In May, the sector as a whole broke the 200-period moving average (roughly 225ish), moved considerably higher, pulled back, and recently exploded to roughly the 300 level. The weekly chart is now rapidly approaching the 200-period moving average, and it might indicate a good time to take profits and lock in some gains. For aggressive traders, this area might also be a good place to initiate some short positions. Leg into shorts, place a stop above the 200-period moving average, and you might have yourself a low-risk entry point. My eyes will stay focused on the 270 level...if we break this, a pullback all the way to 245ish would not surprise me.

Stocks to watch: (NasdaqNMSCHNNews), (NYSEPDNews)



Wrap Up:

The extended VIX and VXN (to the downside) is telling us that odds say we are going lower in the next few days. When this happens, you can react in numerous ways. For us, we prefer to lock in gains on longs when the market is telling us it 'should' go lower. If shorts are available, we gladly take them, but for the time being, it might be best not to initiate new longs.

Paul Taglia and Larry Connors