Art & Science of Active Trend Trading April 8th

April 8, 2018

Good Day Traders,

Last week was a very interesting week in the market.  Volatility and wide daily swings continue to be controlled by rumor and tweets about the potential trade war with China.  IBD shows the Indexes in Correction.  It’s interesting that this categorization has now last for a few days.  This is longer than what has happen in the recent past when rally attempts were quickly followed by follow through.  Each of my 3 Tracking Indexes (SPX, NDX & RUT) are sitting on top of a support/demand zone that has been tested several times over the past few weeks.  Is the up and down bounces due to the potential trade wars the only pushing the markets around or could it be that a more significant correction is in order?  Check out both the Weekly & Monthly Charts and it appears more downside could be in offing.  Consider shifting to shorter term holding periods for bullish trades or just wait for pullbacks into moving averages at resistance/supply zones to take downside trades.

I’ve included a weekly chart of NDX.  Price action appears to be in a topping process.  Prices are currently at a Bounce Zone so a move back up towards 7200 would not be a surprise.  A break below 6157 provides a downside target at 5100 which would reflect a 29% drop from the highs.  The latest 4 week drop was signaled by strong negative divergence on both TSI & MF.  Momentum on both do not appear to be ready change direction yet, so holding a downside bias would be in order and long trades should bel held lightly.   I would suggest studying the drop back in 2016 and how the TSI and MF responded.  Additionally, study the Topping Pattern from 2007.  When the market is topping the volatility and range of price action moves can be greater than average and provide quick trading opportunities for the nimble trader.

Bounce Zones for Premium Members: If you are a premium member some very powerful conditional order setup information will soon be available to complement the “Go-No Go” Table each week. Chart showing zones where traders can expect prices to bounce due to supply and demand pressures. What does this mean for Premium members? Charts of our ETFs and Core Stocks with define Bounce Zones will empower you to place conditional orders around these areas for both entry and planned exits. This will be one more way Active Trend Trading will help Premium Traders with limit time for market analysis. Stay tuned for more on this beneficial feature!

With the Indexes showing weakness look for stocks that are holding up more strongly than the Indexes. Here’s a handful to watch: PAGS, WB, LGIH, RHT, COUP, TAL, GRUB, FANG and VNOM.

Remember to register for the After Market Monday and Making Money Trading Stocks and ETFs each week. In these webinars I will provide 10-12 stock set ups per year. All Levels of ATTS members will receive these trade email alerts. The NEW Composite Watch List provides a sort of all stocks that appeared on multiple Premium IBD Watch Lists this week. Often appearing on multiple list is a sign of strength and identifies a strong long term candidate. New Composite List Provided Below!

Register here to not miss the BONUS Trades or the ATTS Webinar Invitation list:

Running List, Strongest Fundamental stocks on the IBD 50 and the NEW Composite List of Stocks showing up on multiple IBD Watch List on April 1st.

Running List: 109 stocks are on the 2018 Running list. Major swap out this week. Find the list here: Running 4-8

When the new IBD 50 list comes out twice per week I conduct a fundamental sort which results in the top fundamental IBD 50 stocks being identified. The top fundamental stocks for this week are: WB, LGIH, GRUB, NOW, FND, ABMD, CPRT & PAYC.  This sort is provided at: 4-8 Sorted

A new addition to the weekly watch lists for Active Trend Traders is a Composite List of IPOs and Growth Stocks appearing on multiple IBD watch list each weekend. When a stock appears on multiple Premium Lists it can potentially be an indication of excellent strength. The stocks on the weekly Composite List may not be at a sound trigger point but may be worth watching for future entries. I will do an analysis of the list looking for price near potential triggers. Stocks near potential triggers will be highlighted. The top stocks appearing on more than one IBD watch list last week are shown in the table below. The Composite List for this week:    Composite 4-8