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. Stock market resiliency could be tested again today as news from Greece will have heavy influence on price action. Either a bailout will be solidified as soon as today, which could send the market higher, or an agreement that includes tough reforms and austerity will not be met putting downward pressure on stocks.

Let's check in with the key levels on the S&P 500 Index (SPY) weekly chart below.

The broad market is within a hair's breadth of horizontal resistance. When price comes into an area where prior highs are relatively close (yellow shade) it is just as likely to reverse off one level as it is the other. This precise resistance level uncertainty combined with the fact that this rally is now five and a half weeks old is more than enough reason to avoid putting on new long positions here.

For those holding long positions, don't get greedy. If stocks rally on good European news, use it as an opportunity to lighten up while simultaneously trailing remaining portions with stops. In addition, have a tight list of short plays ready while monitoring broad market reaction to the 137.18 SPY level if price trades up that high. A relief reversal off an important prior high this late in the rally is a nice short setup.

Check out the short video in the upper left corner of the home page at www.shadowtrader.net for a short at what a couple of other broad market indicators are saying.

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.

Our statistical tracking of the ShadowTrader Sector Trend Scores has triggered a short term bearish signal for the broad market as of Wednesday's close.

This indicator has been correct 22 of the last 29 signals as a predictor of a forthcoming short term move by the broad market. An indication is credited as being successful if within three days of the alert, the SPY closes below the closing price of the day the alert was triggered.

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
HLF	long	75	02/03	58.50	n/a	n/a	62.00	59.00	open	59.84	1.34	$101	$4,388
	Sold half position for 1.40 gain
LMT	short	150	02/03	87.50	n/a	n/a	83.00	90.50	open	87.64	(0.14)	($21)	$13,125
	Shorted at 10 month highs

CLOSED 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	02/07	17.90	16.50	17.90	closed	n/a	(0.49)	($294)	$10,446
	Exited trade as broad market persisted to the upside
HLF	long	75	02/03	58.50	02/08	59.90	62.00	59.00	closed	n/a	1.40	$105	$4,388
	Sold half position for 1.40 gain
CRR	long	75	02/08	90.30	02/08	91.00	120.00	83.60	closed	n/a	0.70	$53	$6,773
	Scratched trade on negative news release shortly after entry
TOTALS:	225	open shares (open capital committed doesn't include closed trades)											$17,513