Corporate bonds are still under pressure and are not able to find strong buying interest. It looks like investors expect worse conditions and want to have bigger yield on corporate bonds.
It correspondents with analysis I read that lending is tightening in a lot of banks. It will be hard time for every company based on huge debt issuance.
So corporate bond ETF offers nice short opportunity in 101 area with target in new low.
I like action provided by ETF representing Transport sector. This sector shows nice signs of relative strength. It is also near long term highs. Therefore I watch this sector for ETF trade and also different stocks in this sector for my swing stock trading strategy.
I just finished reading of book: The Zurich Axioms
Although this book is not about any specific stock trading strategy it is worth of reading.
It describes 10 main points everybody should know and consider when speculating/trading. With stocks, currencies, commodities or real estate, arts , wine or anything else.
As you can see on chart, GLD is near important support level. I closed my Gold shorts (via Ultra short ETF for Gold - DZZ) on Friday.
I am now waiting for bounce which allow me to enter new trade in gold - I expect that such bounce could offer good short setup for swing ETF trade
I am not very active this week. FED meeting was one reason. Low volumes during last 2 weeks is another. I do no see this up move as very bullish. I still see it as possible short selling opportunity.
Especially European indexes are weak link. Check DAX, FTSE, IBEX etc… They will drop much more then US markets I think.
But as US markets are my main place for trading I preferably watch them. And I found relative weakness in Industrials sector. So I have prepared list of potential short swing trade candidates from this sector. It is also possile to trade it via Short ETF for Industrial sector.
I have noticed nice chart of KG. You can see that this stock is going to try to make breakout of 12 - 12.50 area. Target area is in 16 - 18 area.
I mentioned basic materials sector already as bearish trade opportunity.
Now it looks like this whole sector is headed down which means that Ultra short ETF tracking this sector can make breakout. See situation on chart
I monitor several coal stocks. They started to show important weakness. I think we could see one more move down in this Coal sector.
I have noticed bearish action in Basic Materials sector. This sector was one of strongest in past months. It looks like huge profit taking in this sector is taking place.
I noticed bearish chart pattern forming on chart of XLB - Basic Materials ETF.
It was wild action on stock markets this week.
But I have to say that I feel that US markets want to pause in declines. I have noticed several signs during this week which point me to this idea.
I noticed that SP500 and Nasdaq are not moving down too much. They are already in area of support levels. Only Dow Jones Industrial as weakest one is still dropping. But area around 10800 - 11000 should work as support area and stop this drop of DJIA.
The strongest is Nasdaq (based on relative strength measurement of my analysis) . You can notice that volume associated with bullish candlesticks is higher then with bearish. I feel it as signal that shorts are being covered.
And therefore I am preparing small longs in technology area in strongest sectors and strongest stocks.
