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ShadowTraderPro Swing Trader 02.09.12 $SPY $DBD $MSFT #trading #stocks
Swing Trader

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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.

To get the most out of your subscription, please read our Swing Trader User's Guide

If you have any questions or comments regarding commentary or plays in this newsletter, please email to

Looking Ahead

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 for a short at what a couple of other broad market indicators are saying.

Under The Hood

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.

Dow Jones Industrial Average12883.95 5.75 0.04%
S&P 500 Index1349.96 2.91 0.22%
Nasdaq Composite2915.86 11.78 0.41%
Nasdaq 1002545.72 13.66 0.54%
Russell 2000828.39 1.02 0.12%
Spot Gold1731.40-13.73-0.79%
Crude Oil98.93 0.18 0.18%
NYSE Overall Volume7,652,400Kn/a 5.07%
Nasdaq Overall Volume1,968,045Kn/a 11.00%
NYSE Breadth1.42 : 1positive
Nasdaq Breadth1.84 : 1positive
NYSE Breadth Ratio58.75
Nasdaq Breadth Ratio64.75
NYSE Advancers/Decliners484
Nasdaq Advancers/Decliners329
NYSE Trin0.97
Nasdaq Trin0.71
Market Profile and Pivot Points for ES and NQ for Thursday  
How to put value areas and breadth bubbles on your charts - click here
Value Area High 1347.00 2542.75
Point of Control 1346.50 2533.50
Value Area Low 1342.00 2529.50
R3 1359.502574.33
R2 1353.502558.92
R1 1350.252551.83
Pivot 1344.252536.42
S1 1341.002529.33
S2 1335.002513.92
S3 1331.752506.83

Pivot points provided by Prodigio RTS. For more information contact:

ShadowTrader Sector Trend Scores

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.

Heads Up

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

Today- 02/09/2012

07:00 am EST - BOE Announcement
07:45 am EST - ECB Announcement
08:30 am EST - Jobless Claims
10:00 am EST - Wholesale Trade
10:30 am EST - EIA Natural Gas Report

Friday - 02/10/2011

08:30 am EST - International Trade
09:55 am EST - Consumer Sentiment
12:30 pm EST - Ben Bernanke Speaks
02:00 pm EST - Treasury Budget
Reporting earnings today: FLIR, LH, LYB, MT, NYX, PPL

Monday - 02/13/2012

No economic news currently scheduled.
Reporting earnings today: CEG, DFG, ECL, FIS, ICON, PAAS, RAX, TEVA, TV

Bulls and Bears

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

 Symbol Trigger Price Stop Price Notes

Short Ideas

 Symbol Trigger Price Stop Price Notes
DBD 37.00-37.50 38.50 Coming into 10 month highs
EMN 55.21-55.51 57.04 Relisted - Please see Monday's Looking Ahead section
MSFT 31.43-31.73 32.50 Potential triple top at 1 year highs

ShadowTrader Model Portfolio

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
target stop status mark
HLFlong 7502/0358.50 n/a n/a 62.0059.00 open 59.841.34$101$4,388
  Sold half position for 1.40 gain
LMTshort 15002/0387.50 n/a n/a 83.0090.50 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
target stop status mark
DELLshort 60002/0117.4102/0717.9016.5017.90closed n/a(0.49)($294)$10,446
  Exited trade as broad market persisted to the upside
HLFlong 7502/0358.5002/0859.9062.0059.00closed n/a1.40$105$4,388
  Sold half position for 1.40 gain
CRRlong 7502/0890.3002/0891.00120.0083.60closed n/a0.70$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

Click here for year to date Model Portfolio Performance - 2012

Click here for Model Portfolio Performance - 2011

Click here for Model Portfolio Performance - 2010

Click here for Model Portfolio Performance - 2009

Click here for Model Portfolio Performance - 2008

All content © 2012 by ShadowTrader Technologies, LLC. All rights reserved.

Disclaimer and Waiver of Claims: The ShadowTraderPro Swing Trader is a newsletter service, designed as supplemental material for the ShadowTraderPro Newsletter subscription service and it is not intended to be a stand alone newsletter. The risk of loss in the trading of any securities products can be substantial. The strategies mentioned here are active trading strategies, therefore you should carefully consider whether such trading is suitable for you in light of your personal investment objectives and financial resources. This material is for information purposes only and should not be construed as an offer or solicitation of an offer to buy or sell any securities. Past performance of any trades mentioned never guarantees future results.

Securities and options involve risk and are not suitable for all investors. See the characteristics and risks of standardized options.

ShadowTrader Swing Trader | 2/8/2012 10:51:51 PM | 0 Comments