A Couple Things To Keep An Eye On

Here's a quick look at some of the good performers from today...maybe this will give us an idea of what to look at for potential trades for tomorrow and possibly the rest of the week. To begin with, here are the 3 ETFs with the highest Relative Strength Scores (a proprietary measure that weights recent price action to the S&P 500) with their corresponding Thermometer Temperatures (proprietary score that measures a stock/etf's ability to register higher highs and higher lows):As you can see, Semiconductors led the pack today (#1 out of 30), with Consumer Discretionary not far behind (#3 out of 30). Lets take a closer look at the Semiconductors. Here's the Market Thermometer Temperatures for the three individual stocks that I follow in that sector:Not surprising that they are very strong. So far we have established that the Semis were strong today, but how have they been trading lately. For that I look at what I call the cumulative temperature score. This takes the past 5 day's trading action and comes up with 2 scores: an average and a total. Here's where they stand: Out of the 30 stocks in 10 sectors that I track daily, only 9 of them managed to have thermometer scores above their 5 day average today...and all three of the semiconductor stocks turned out to be part of those 9 stocks. Furthermore, the 5 day totals are in the top 25% rank of the 30 stocks, this shows that the stocks have been bullish for several days, not just one. These are both very bullish signs.

So what does all this mean? It means to watch the semiconductors! I track and trade (in my personal account) these three (INTC, TXN, AMAT) and I also watch and trade (for the firm account) SNDK. I'll be looking for long trades in these as long as SMH continues to show strength.

What else is looking interesting right now? The quick answer is GE...and maybe industrials in general. To begin with, GE has a phenomenal Temperature score today..see below: Also, there was some interesting volume in the industrials today..GE included. Only 1/3 of the stocks that I track (10 out of 30) traded volume today that was above their 20 day average volume and all three industrials were in this group. This alone makes them worth watching...at least worth keeping an eye on GE for a potential day or swing trade.

This is the type of analysis that I do on a daily basis. I've admitted that I love spreadsheets and this is how I use them. Going through these exercises on a daily basis helps me keep on top of market action and it gives me trading ideas.

That's all I've got for now..hope everyone's having a great week so far.

TLT

Anemic Volume Today

It's no surprise that today was a range bound trading day with little opportunity, unless you were trading something that was stock specific like CSCO. Volume was well below average for most stocks and indexes. Here's how I track intra-day volume in order to get a clue as to it being a trend day or a range day, which is important to identify so that you have realistic expectations for follow through on trades.

I keep an excel spread sheet that I update daily. This spread sheet tracks the average for the prior 20 trading day's average volume, range and 14 period ATR (average true range) for each 15 minute period of the trading day on the S&P 500 index etf (SPY). Okay, that was a mouthful. This spreadsheet is useful because I can look at it and tell what the average volume for the prior 20 days on SPY between 10:00 and 10:15. For example, today's volume for that period was roughly 2.5 million shares. By itself that doesn't mean much to some people. Well, my spread sheet tells me that the average for that 15 minute period (10:00-10:15) for the past 20 trading days is 6.8 million. It doesn't take a market wizard to figure out that today's volume for that period was way below average.

I print this sheet out in the morning and leave blanks to hand write the SPY volumes for that trading day. This method works better than just a moving average on the volume below the chart because it compares apples to apples (or the same period of time to the same prior periods). Here's a screen shot of today's sheet:Maybe we'll see a little more follow through tomorrow..this chop can really put a dent in the P&L if you're not careful. The chop got me a little but fortunately I was catch some of the CSCO move this afternoon to put me in the green for the day.

Hope you all had a good start to the trading week.

TLT