The ShadowTraderPro Swing Trader is your every morning dose of market reality brought to you from the resident geniuses at ShadowTrader. Each issue contains a full report on the prior day's action, including market internals, technicals, and what sectors were hot and cold. Each issue also includes the ShadowTraderPro Model Portfolio, which updates members on what stock plays STPro is currently engaged in officially, as well as provide a daily list of long and short setups for more self-directed traders and investors.

Good morning traders. SAP AG (SAP) is another stock we are tracking for a potential reversal play. Please observe the chart below

In March of 2012, SAP put in a new swing high off the swing lows of December 2011. Now the stock is less than one point from the 61.8% Fibonacci retracement level between these two points.

In addition, SAP gathers more technical support, just 1.60 points under yesterday's close, at the ascending trendline which is drawn from the initial lows in September 2011.

SAP will remain on our radar even if the market trades higher into options expiry and our entry range is not triggered this week. It is unusual for a stock not to trade down to the next Fibonacci level once it has traded under the half way point between the previous higher level (50.0% in this case) and the next lower level (61.8% in this case).

When we say "under the hood" we mean market internals, ie: what was really happening behind the scenes. ShadowTraders who listen to our daily broadcast every day live on the thinkorswim platform know that all closing figures on the major averages should only be interpreted in the context of market internals. Look for convergences and divergences in the breadth, a/d line, and trin figures below to either confirm or cast doubt on what all those talking heads on TV are telling you.

The ShadowTrader Sector Trend Score matrix is a proprietary method of assigning values to twenty five sectors that are a representative cross-section of the market as a whole. The heat map in the trend score column defines the current strength or weakness of that sector using a proprietary weighting formula. Sectors bolded in green and red are the two sectors that experienced the largest absolute gain and loss in trend score over the prior day. We strongly urge subscribers to read the full explanation of the meaning and calculation of the trend scores in the Swing Trader User's Guide.

Nineteen of twenty five ShadowTrader Sectors closed lower on Wednesday. The oversold reading we discussed Tuesday is still active.

XBD has closed lower fourteen consecutive days, OSX has closed lower for eleven consecutive days, CEX has ended lower seven consecutive days, and $DJUSCL has closed lower five consecutive days. Beyond this, XNG, XOI, BKX, UTY, $DJUSCA, and IUX have all closed lower four consecutive days.

Up and coming economic and corporate data that may move markets this week:

This section is for self-directed traders and investors who like to "do it themselves". Every trading day, Bulls and Bears will list long and short equity setups with defined entries and stops. Note: A listing in this section does NOT necessarily mean that the stock will end up as a part of the ShadowTraderPro Model Portfolio. Plays listed here change daily and are not managed or tracked by ShadowTrader unless traded via MyTrade posting.

Long Ideas

Short Ideas

The matrix below shows all current ShadowTrader Pro plays in the Model Portfolio. The Model Portfolio contains only those plays that are sent out in real-time via posting to MyTrade or text message to your phone. Bulls and Bears plays above are not actively managed or tracked. Current open positions are on top, with positions that were closed in the current calendar week on the bottom. Closed positions are moved out of the matrix on Monday mornings and posted in our performance page here.

To get the most out of your subscription and for detailed instructions on how to structure your own portfolio, read our Swing Trader User's Guide

CLOSED POSITIONS - week of 05/14/12 - 05/18/12
sym	dir	size	date entered	entry price	date closed	exit price	target	stop	status	mark to market	p&l points	p&l capital	capital commit
HES	long	150	05/14	47.05	05/15/12	46.05	52.00	46.05	closed	n/a	(1.00)	($150)	$7,058
	Hit raised stop in face of broad market weakness
TOTALS:	0	open shares (open capital committed doesn't include closed trades)											$0.00

The ShadowTraderPro Swing Trader is your every morning dose of market reality brought to you from the resident geniuses at ShadowTrader. Each issue contains a full report on the prior day's action, including market internals, technicals, and what sectors were hot and cold. Each issue also includes the ShadowTraderPro Model Portfolio, which updates members on what stock plays STPro is currently engaged in officially, as well as provide a daily list of long and short setups for more self-directed traders and investors.

Good morning traders. JOY Global, Inc. (JOY) is one stock we are tracking for a possible reversal back higher into options expiry.

Please observe the chart below.

The first test of a prior high or low possesses a high probability of price reversal. This is the exact type of play setting up on the daily chart of JOY. The chance of a reversal off the prior low at 57.48 is enhanced with the general tendency of stocks to move higher into options expiry. We will consider JOY for a bounce play with no expectation of a extended run back higher.

When we say "under the hood" we mean market internals, ie: what was really happening behind the scenes. ShadowTraders who listen to our daily broadcast every day live on the thinkorswim platform know that all closing figures on the major averages should only be interpreted in the context of market internals. Look for convergences and divergences in the breadth, a/d line, and trin figures below to either confirm or cast doubt on what all those talking heads on TV are telling you.

The ShadowTrader Sector Trend Score matrix is a proprietary method of assigning values to twenty five sectors that are a representative cross-section of the market as a whole. The heat map in the trend score column defines the current strength or weakness of that sector using a proprietary weighting formula. Sectors bolded in green and red are the two sectors that experienced the largest absolute gain and loss in trend score over the prior day. We strongly urge subscribers to read the full explanation of the meaning and calculation of the trend scores in the Swing Trader User's Guide.

Twenty of twenty five ShadowTrader Sectors closed lower on Tuesday. The oversold reading we discussed yesterday is still active. When this signal occurs, traders should be alert to the higher probability of a broad market reversal within 1-2 trading days of the signal (Monday's close).

XBD has closed lower for thirteen consecutive days, OSX has closed lower for ten consecutive days, and CEX has ended lower six consecutive days in a row.

Up and coming economic and corporate data that may move markets this week:

This section is for self-directed traders and investors who like to "do it themselves". Every trading day, Bulls and Bears will list long and short equity setups with defined entries and stops. Note: A listing in this section does NOT necessarily mean that the stock will end up as a part of the ShadowTraderPro Model Portfolio. Plays listed here change daily and are not managed or tracked by ShadowTrader unless traded via MyTrade posting.

Long Ideas

Short Ideas

The matrix below shows all current ShadowTrader Pro plays in the Model Portfolio. The Model Portfolio contains only those plays that are sent out in real-time via posting to MyTrade or text message to your phone. Bulls and Bears plays above are not actively managed or tracked. Current open positions are on top, with positions that were closed in the current calendar week on the bottom. Closed positions are moved out of the matrix on Monday mornings and posted in our performance page here.

To get the most out of your subscription and for detailed instructions on how to structure your own portfolio, read our Swing Trader User's Guide

CLOSED POSITIONS - week of 05/14/12 - 05/18/12
sym	dir	size	date entered	entry price	date closed	exit price	target	stop	status	mark to market	p&l points	p&l capital	capital commit
HES	long	150	05/14	47.05	05/15/12	46.05	52.00	46.05	closed	n/a	(1.00)	($150)	$7,058
	Hit raised stop in face of broad market weakness
TOTALS:	0	open shares (open capital committed doesn't include closed trades)											$0.00

The ShadowTraderPro Swing Trader is your every morning dose of market reality brought to you from the resident geniuses at ShadowTrader. Each issue contains a full report on the prior day's action, including market internals, technicals, and what sectors were hot and cold. Each issue also includes the ShadowTraderPro Model Portfolio, which updates members on what stock plays STPro is currently engaged in officially, as well as provide a daily list of long and short setups for more self-directed traders and investors.

Good morning traders. From a pure technical perspective, we wouldn't be surprised to see a snap back rally in the short term. Unfortunately, there are several major unknowns hanging over the market that can push things to an even greater extreme. Namely news out of Europe and the high potential for analyst downgrades in the financial sector.

The chart below shows how we are viewing possible price movement of the broad market in the near term.

We have applied two studies to the daily S&P 500 Index (SPY) chart. A Fibonacci retracement from the low on 12/19/11 to the high on 04/02/12 (green circles) and a Fibonacci extension from the high on 04/02/12 to the low on 04/10/12 and then to the high on 05/01/12 (red circles).

The 38.2% level of the retracement study sits just under yesterday's low at 133.74. This price level is also very close to the top of the unclosed gap highlighted by the blue rectangle. Combined, both could provide technical support for the SPY in the short term.

However, if the 38.2% level and gap are violated, we will look to the confluence of the 50.0% (131.12) and 161.8% (131.22) levels produced by the retracement and extension studies respectively as the next level of support.

When we say "under the hood" we mean market internals, ie: what was really happening behind the scenes. ShadowTraders who listen to our daily broadcast every day live on the thinkorswim platform know that all closing figures on the major averages should only be interpreted in the context of market internals. Look for convergences and divergences in the breadth, a/d line, and trin figures below to either confirm or cast doubt on what all those talking heads on TV are telling you.

The ShadowTrader Sector Trend Score matrix is a proprietary method of assigning values to twenty five sectors that are a representative cross-section of the market as a whole. The heat map in the trend score column defines the current strength or weakness of that sector using a proprietary weighting formula. Sectors bolded in green and red are the two sectors that experienced the largest absolute gain and loss in trend score over the prior day. We strongly urge subscribers to read the full explanation of the meaning and calculation of the trend scores in the Swing Trader User's Guide.

All twenty five ShadowTrader Sectors closed lower on Monday. This triggered an oversold reading where the average number of consecutive days higher and lower of all 25 ShadowTrader Sectors is less than -2.50. As of yesterday's close, the reading was -2.52. When this signal occurs, traders should be alert to the higher probability of a broad market reversal within 1-2 trading days.

This signal is separate from the short term trend reversal indicator we sometimes refer to as "The Time Machine".

Up and coming economic and corporate data that may move markets this week:

This section is for self-directed traders and investors who like to "do it themselves". Every trading day, Bulls and Bears will list long and short equity setups with defined entries and stops. Note: A listing in this section does NOT necessarily mean that the stock will end up as a part of the ShadowTraderPro Model Portfolio. Plays listed here change daily and are not managed or tracked by ShadowTrader unless traded via MyTrade posting.

Long Ideas

Short Ideas

The matrix below shows all current ShadowTrader Pro plays in the Model Portfolio. The Model Portfolio contains only those plays that are sent out in real-time via posting to MyTrade or text message to your phone. Bulls and Bears plays above are not actively managed or tracked. Current open positions are on top, with positions that were closed in the current calendar week on the bottom. Closed positions are moved out of the matrix on Monday mornings and posted in our performance page here.

To get the most out of your subscription and for detailed instructions on how to structure your own portfolio, read our Swing Trader User's Guide

OPEN POSITIONS - week of 05/14/12 - 05/18/12
sym	dir	size	date entered	entry price	date closed	exit price	target	stop	status	mark to market	p&l points	p&l capital	capital commit
HES	long	150	05/14	47.05	n/a	n/a	52.00	44.00	open	46.63	(0.42)	($63)	$7,058
	Took long position at nine month lows

The ShadowTraderPro Swing Trader is your every morning dose of market reality brought to you from the resident geniuses at ShadowTrader. Each issue contains a full report on the prior day's action, including market internals, technicals, and what sectors were hot and cold. Each issue also includes the ShadowTraderPro Model Portfolio, which updates members on what stock plays STPro is currently engaged in officially, as well as provide a daily list of long and short setups for more self-directed traders and investors.

Good morning traders. How low can gold go? Let's have a look at the chart of the Gold ETF (GLD) below.  

Last week, GLD broke trend by closing under the long term ascending trendline shown on the monthly chart above. With the price in the midst of an area of limited support, we anticipate this move will continue lower.

We see two potential price levels where GLD may find support. The first is the prior swing low at 148.27 (green rectangle). The second is the 38.2% Fibonacci level of the long term trendline that was just broken.

Remember, this analysis is being done on a monthly chart so it could take as long as four to six weeks for these lower price levels to be reached. By tracking the daily chart of GLD in coming days and weeks, traders might find technical points between Friday's close and these two lower price targets to execute short trades in coming days and/or weeks.

When we say "under the hood" we mean market internals, ie: what was really happening behind the scenes. ShadowTraders who listen to our daily broadcast every day live on the thinkorswim platform know that all closing figures on the major averages should only be interpreted in the context of market internals. Look for convergences and divergences in the breadth, a/d line, and trin figures below to either confirm or cast doubt on what all those talking heads on TV are telling you.

The ShadowTrader Sector Trend Score matrix is a proprietary method of assigning values to twenty five sectors that are a representative cross-section of the market as a whole. The heat map in the trend score column defines the current strength or weakness of that sector using a proprietary weighting formula. Sectors bolded in green and red are the two sectors that experienced the largest absolute gain and loss in trend score over the prior day. We strongly urge subscribers to read the full explanation of the meaning and calculation of the trend scores in the Swing Trader User's Guide.

Seventeen of twenty five ShadowTrader Sectors closed loswer on Friday. XBD was lower for the eleventh consecutive day and has broken the 200ma with a bearish daily candle. OSX ended down for the eighth consecutive day while CEX closed lower for the fourth consecutive day.

Up and coming economic and corporate data that may move markets this week:

This section is for self-directed traders and investors who like to "do it themselves". Every trading day, Bulls and Bears will list long and short equity setups with defined entries and stops. Note: A listing in this section does NOT necessarily mean that the stock will end up as a part of the ShadowTraderPro Model Portfolio. Plays listed here change daily and are not managed or tracked by ShadowTrader unless traded via MyTrade posting.

Long Ideas

Short Ideas

The matrix below shows all current ShadowTrader Pro plays in the Model Portfolio. The Model Portfolio contains only those plays that are sent out in real-time via posting to MyTrade or text message to your phone. Bulls and Bears plays above are not actively managed or tracked. Current open positions are on top, with positions that were closed in the current calendar week on the bottom. Closed positions are moved out of the matrix on Monday mornings and posted in our performance page here.

To get the most out of your subscription and for detailed instructions on how to structure your own portfolio, read our Swing Trader User's Guide

CLOSED POSITIONS - week of 05/07/12 - 05/11/12
sym	dir	size	date entered	entry price	date closed	exit price	target	stop	status	mark to market	p&l points	p&l capital	capital commit
BRO	short	400	04/26	27.00	05/08	26.32	25.00	27.75	closed	n/a	0.68	$272	$10,800
	Took profit on 5th consecutive day lower
WCC	short	50	04/26	67.30	05/08	62.60	63.00	65.30	closed	n/a	4.70	$235	$3,365
	Closed remaining position for 4.70 point gain
FIO	long	125	05/08	21.00	05/08	20.77	24.50	19.20	closed	n/a	(0.23)	($29)	$2,625
	Stock didn't act right after entry, closed trade for small loss
TOTALS:	0	open shares (open capital committed doesn't include closed trades)											$0.00

The ShadowTraderPro Swing Trader is your every morning dose of market reality brought to you from the resident geniuses at ShadowTrader. Each issue contains a full report on the prior day's action, including market internals, technicals, and what sectors were hot and cold. Each issue also includes the ShadowTraderPro Model Portfolio, which updates members on what stock plays STPro is currently engaged in officially, as well as provide a daily list of long and short setups for more self-directed traders and investors.

Good morning traders. With JP Morgan Chase & Co.'s (JPM) announcement last evening concerning a $2 billion trading loss, the entire banking sector will be under pressure today. One of the more interesting charts in the banking sector is of State Street Corp. (STT).  

Please observe the chart below.

The blue circles mark the recent double top put in by STT. On Wednesday of this week, the stock fell below the ascending trendline and after attempting to recapture the top side of the trendline yesterday, the stock closed beneath it again forming a bearish daily price bar in the process.

A move below the lowest point between the double top (green circle) will confirm the bearish double top pattern, but we are even more interested to see how price behaves when it reaches the descending trendline (orange rectangle). A loss of support here, and STT would have a very good chance of trading down to the prior swing low of 38.21 (black line).

When we say "under the hood" we mean market internals, ie: what was really happening behind the scenes. ShadowTraders who listen to our daily broadcast every day live on the thinkorswim platform know that all closing figures on the major averages should only be interpreted in the context of market internals. Look for convergences and divergences in the breadth, a/d line, and trin figures below to either confirm or cast doubt on what all those talking heads on TV are telling you.

The ShadowTrader Sector Trend Score matrix is a proprietary method of assigning values to twenty five sectors that are a representative cross-section of the market as a whole. The heat map in the trend score column defines the current strength or weakness of that sector using a proprietary weighting formula. Sectors bolded in green and red are the two sectors that experienced the largest absolute gain and loss in trend score over the prior day. We strongly urge subscribers to read the full explanation of the meaning and calculation of the trend scores in the Swing Trader User's Guide.

Sixteen of twenty five ShadowTrader Sectors closed higher yesterday. XBD was lower for the tenth consecutive day. OSX closed down for the seventh consecutive day and SOX closed lower for the sixth consecutive day.

Up and coming economic and corporate data that may move markets this week:

This section is for self-directed traders and investors who like to "do it themselves". Every trading day, Bulls and Bears will list long and short equity setups with defined entries and stops. Note: A listing in this section does NOT necessarily mean that the stock will end up as a part of the ShadowTraderPro Model Portfolio. Plays listed here change daily and are not managed or tracked by ShadowTrader unless traded via MyTrade posting.

Long Ideas

Short Ideas

The matrix below shows all current ShadowTrader Pro plays in the Model Portfolio. The Model Portfolio contains only those plays that are sent out in real-time via posting to MyTrade or text message to your phone. Bulls and Bears plays above are not actively managed or tracked. Current open positions are on top, with positions that were closed in the current calendar week on the bottom. Closed positions are moved out of the matrix on Monday mornings and posted in our performance page here.

To get the most out of your subscription and for detailed instructions on how to structure your own portfolio, read our Swing Trader User's Guide

CLOSED POSITIONS - week of 05/07/12 - 05/11/12
sym	dir	size	date entered	entry price	date closed	exit price	target	stop	status	mark to market	p&l points	p&l capital	capital commit
BRO	short	400	04/26	27.00	05/08	26.32	25.00	27.75	closed	n/a	0.68	$272	$10,800
	Took profit on 5th consecutive day lower
WCC	short	50	04/26	67.30	05/08	62.60	63.00	65.30	closed	n/a	4.70	$235	$3,365
	Closed remaining position for 4.70 point gain
FIO	long	125	05/08	21.00	05/08	20.77	24.50	19.20	closed	n/a	(0.23)	($29)	$2,625
	Stock didn't act right after entry, closed trade for small loss
TOTALS:	0	open shares (open capital committed doesn't include closed trades)											$0.00