Let’s start June with our long-term, hands-off technical signal on whether to be in or out of the market, as a buy and hold investor.
Our Sell Signal on the Monthly time-frame did not trigger at the end of May. The close was well over our stop. Therefore the indexed equity portion of a long-term diversified portfolio should remain invested going into June.
However we will offer some potential stop targets, should things go quickly South.
The Monthly chart of SPY gives the best clue. We closed May right at the convergence of the 10-month and 30-month moving averages. What a precarious spot.
Our line in the sand at the May’s EOM close is indicated below by the yellow rectangle.
Going forward, we will use the “Danger Zone” right below the 38.2 Fib retracement as our “capital preservation” stop.
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We are in a new channel that could potentially be construed as constructive. However recent events warn that anything can happen.
We will proceed with extreme caution.
Based on the Weekly chart below, we will suggest long-term investors keep a keen eye on each weeks close and choose a protective stop between S&P 10400 for conservative accounts and 10014, for those that don’t want to get whipsawed with intra-week volatility.
Anything in the yellow rectangle is danger territory, but there is potential for the market to battle it’s way up through the channel.
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On the daily chart below we see the potential for a rebound or tradeable bounce.
However the overhead resistance at the 200-day, and subsequently the 20 and 50 is substantial.
We will be impressed if the market can battle it’s way up this channel.
We have seen the market scale numerous “walls of worry”, so we will remain optimistic, but keep our “line in the sand stop-loss” somewhere in the range described above.
Widows and orphans can relax for now without having to worry about moving to cash based on the Monthly close.
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Moving on to our Swing-Trades last month, here are the Research Lab Trade Plan stats for May.
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As you know, we typically average 10 trades per month but May only had 5.
We still have 1 open trade that has hit Target 2 and the stop-loss moved up.
When NTRI gets closed, it will go into the May 2010 stats, which were quite respectable in our opinion given recent market conditions.
UCO was a well-timed entry and the price exceeded Target 2 by some measure. It will be interesting to see where oil goes from here.
UCO, which is 2x long oil, might have upside potential going forward. If one were fortunate to have taken partial profits all all three targets, retaining a small, low-cost position might turn out quite profitable.
As you know, when the targets get hit the system closes the trade, but part of our strategy revolves around retaining a small position if you are so inclined.
Let’s look at NTRI, the only open Trade Plan carrying over into June.
With T2 in the bag, it’s a no-lose trade at this point and will only serve to make the stats above look better.
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In May we took the spider approach as we have discussed here. Rather than trying to overtrade in tumultuous conditions, we were much more selective and waited for just the right set-up.
Of course there was the GTN spec play on a three dollar stock, but we discussed that last week.
All in all I am calling it a good month for Research Lab members. The stats above speak for themselves.
Honestly the swing-trades pale in comparison to the real-time stocks picks we saw almost daily last month.
There were tons of good picks and literally everyday we knew exactly which stocks were making moves.
Research Lab members can easily review the picks for any trading day in May using the Calendar tool on the Performance Tracking page.
We urge you to look back to see the picks at the close of each day. It’s a quite interesting review indeed.
So what do we do in June?
We take it up a notch.
Our loyal Research Lab members are in for a pleasant surprise. We are about to introduce several new features that will add extraordinary value to our tool-set.
Let me give you a sneak peek.
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One new Module consists of 4 files geared toward swing-traders.
Pivot High and Pivot Low signals are generated using the S&P 100 and the NASDAQ 100 and presented as an image. They offer potential trade entries going into the following week.
We are also including 2 new scan result lists. The 90-90 list and our “Stocks to Watch” list.
Each week we will bring you the “best of the best” stocks for your radar screen. These are the raw lists we use as a starting point to find trades. Many of the stocks will be familiar to those that watch the daily picks as they tend to correlate. The cream of the crop so to speak. Each day our system scans for the best stocks and now we will offer our weekly scans for your viewing pleasure.
The nice thing is that the 2 new scan lists are in text format and easy to copy to any charting program or Level I screen.
More details are included in the actual files and we will discuss details on the show.
But that’s not all…
We have redesigned the Research Lab Home page and I think you will agree that it’s a big step forward.
Rather than give it away here and show an image, we will let you see for yourself very soon.
Just a few finishing touches and one day soon you will wake up, log in the Research Lab and say “wow”.
Our best days lie ahead and we sincerely appreciate the support of our Members.
Enjoy the long holiday weekend and join us Wednesday morning at the opening bell.
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