Sunday, June 12, 2016

My Performance This Week



Market took a sudden turn on Friday June 10th and I was stopped out of $NTES and $EDU for a loss. No trader wants to take a loss on a stock that is fundamentally sound and technically showing strength. Both these stocks were showing RS ratings in the 90's and kept appearing on IBD 50 stock screen and were showing up as the sector leaders. There was a strong institutional support and both stocks were trading over 1.5 million shares a day. These are very liquid issues but the market health just deteriorated on Friday with massive sell off. $SPY and $QQQ both had volume over 50% above average and gapped down at the open. Institutions were obviously harvesting profits and rotating into dividend paying stocks once again.


Most traders that I talked to over the weekend were very upset at the losses that they took on their stock positions on Friday because they did not have a stop loss limit order in place. I make it a habit of mine to have contingent orders in place for Loss as well as Profit targets on my positions. Had I not done that than I would be facing a loss of -5.39% on $EDU and -7.35% on $NTES instead of just -3% loss that I had planned with my Trade Plan.


Market Outlook



Traditionally looking over the last 50 years, June and Sept are some of the worst performing months in the market. In 2014 however, June performance surprised us with +1.58% and the $SPY was trading above the 30 day sma all month long. Currently institutions have begun to take positions in dividend paying stocks. In the last 3 weeks, $XLU (Utilities) have gone up a staggering +5%  $XLP (Consumer Staples) +3.78% and $XLV (Health Care) +2.87% Institutions are being defensive once again and that is where I see opportunities this week.


Stocks on My Watch List


  1. $T
  2. $VZ
  3. $TFX
  4. $BCR
  5. $BSX
  6. $IDXX
  7. $RTN
  8. $NOC
  9. $MO
I shall be watching the Asian markets tonight (Sunday) before going to bed to get a clearer sentiment of what to expect Monday morning. I am very cautious heading into the market next week with all the noise in the market about Brexit and the tragedy in Orlando Saturday night. It is best to let the stock charts be your guide. Stock charts are really human emotions on display.


Happy Trading!

Amin

 

DISCLAIMER



Do not take a position unless you are prepared to sustain a TOTAL LOSS. Your loss could include the money you invested as well as commissions and transaction charges.


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