ShadowTraderPro Swing Trader

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. As a follow up to Peter's weekly video in the ShadowTrader Weekend Update, gold (/GC) has all but touched the first long entry point of the recent pullback. Please observe the chart below.

Ascending (or descending) trendline support has the highest probability of holding on the first touch after the line has been established by the first two higher-lows (blue circles). This along with the clean price action by /GC, and yesterday's price deceleration to the downside suggests that a bounce off the trendline is more probable.

Taking a long position in /GC with a stop just under the trendline is a good trade in our book, at least as an opportunity to capitalize on a bounce.

An alternative is to establish a plan to build a position beginning with a "nibble" on a touch of the ascending trednline while remaining capital is reserved in case price moves closer to 1678.00 (blue line).

Remember, price should not undercut the low of the high emotion price bar at 1649.20 (black arrow). If it does, we would have to reassess our bullish bias.

Those that trade GLD in lieu of /GC should use the GC chart as primary since in tracks the price of gold around the clock.

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.

Some froth came off the the general list yesterday with the broad market's move sideways, although a number of sectors remain stretched to the upside. BTK has closed higher for seven straight days. $DJUSNS, XOI, and XTC have all closed higher for five consecutive days. From a technical standpoint, bulls would be well served by another sideways to down 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

OPEN POSITIONS - week of 02/06/12 - 02/10/12
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
DELL	short	600	02/01	17.41	n/a	n/a	16.50	18.10	open	17.65	(0.24)	($144)	$10,446
	Reversal play off prior high
HLF	long	150	02/03	58.50	n/a	n/a	62.00	55.45	open	59.19	0.69	$104	$8,775
	Breakout from consolidation