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ShadowTraderPro Swing Trader 02.16.12 $AAPL #stocks #trading #investing

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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. If there was ever a doubt as to how much bearing the stock of Apple, Inc. (AAPL) currently has on the NASDAQ 100 (NDX) the following test should dispel it. Within 5 seconds, decide which of the two charts below is AAPL and which is NDX. The answer is not stated anywhere on this page. The similarity in price pattern makes it understandable why some will need to consult their own charts to double check their answer.

Perhaps an even more shocking demonstration of AAPL's weight on the NDX is illustrated below.

The four most heavily weighted NDX components are AAPL, QCOM, MSFT, and GOOG (in order of weighting). The chart on the left combines all four. This chart is very similar in price pattern to the first two charts above.

However, the price pattern of the chart on the right looks different than the one on the left and the two charts above. The only difference though, between this chart and the one to the left, is that it does not include AAPL. Only QCOM, MSFT and QCOM) are included.

This should illustrate why it is so important to know what AAPL is doing while trading any form of the NASDAQ 100.

There is chatter that NASDAQ will reduce the weighting of AAPL soon. This won't be the first time this step has been taken and we doubt it will forever eliminate the dramatic effect the stock has on the index in the future.


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 Average 12780.95 -97.33 -0.76%
S&P 500 Index 1343.23 -7.27 -0.54%
Nasdaq Composite 2915.83 -16.00 -0.55%
Nasdaq 100 2556.01 -19.23 -0.75%
Russell 2000 813.98 -6.67 -0.81%
Spot Gold 1728.10 6.20 0.36%
Crude Oil 101.80 0.53 0.52%
NYSE Overall Volume 8,063,700K n/a 8.45%
Nasdaq Overall Volume 2,015,339K n/a -3.82%
NYSE Breadth 1.83 : 1 negative  
Nasdaq Breadth 1.53 : 1 negative  
NYSE Breadth Ratio 35.38    
Nasdaq Breadth Ratio 39.48    
NYSE Advancers/Decliners -460    
Nasdaq Advancers/Decliners -655    
NYSE Trin 1.34    
Nasdaq Trin 0.90    
$VIX 21.14 1.6  
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 1353.00 2599.00
Point of Control 1350.25 2586.75
Value Area Low 1343.50 2568.25
R3 1367.08 2635.83
R2 1360.42 2618.17
R1 1351.33 2587.83
Pivot 1344.67 2570.17
S1 1335.58 2539.83
S2 1328.92 2522.17
S3 1319.83 2491.83

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.

ShadowTrader Sector breadth ended relatively mixed yesterday with 9 closing higher and 16 ending lower. The only sector approaching an extreme number of consecutive days higher or lower is GOX which has closed lower for each of the last four days.


Heads Up


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

Today - 02/16/2012

08:30 am EST - Housing Starts
08:30 am EST - Jobless Claims
08:30 am EST - Producer Price Index
09:00 am EST - Ben Bernanke Speaks
10:00 am EST - Philadelphia Fed Survey

Friday - 02/17/2012

08:30 am EST - CPI and Core CPI
10:00 am EST - Leading Indicators
Reporting earnings today: ABB, AGP, CPB, DLR, EOG, HMSY, HNZ, TOT, VTR

Monday - 02/20/2012

U.S. Holiday, Prsidents Day - Bond and Equity Markets Closed
No economic data scheduled for release
Reporting earnings today: COG, CROX, CTRP, MRX, NU, SHLD, SUG


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
RTN 48.00 47.10 Trendline touch from 09/22 lows
BEAV 46.65 45.14 Possible consolidation breakout

Short Ideas

 Symbol Trigger Price Stop Price Notes
MHK 77.00-78.00 79.75 Approaching 52 week highs
BRCM 38.00-39.00 40.00 Coming into 9 month 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 02/13/12 - 02/17/12
sym dir size date
target stop status mark
CLOSED POSITIONS - week of 02/13/12 - 02/17/12
sym dir size date
target stop status mark
LMT short 150 02/03 87.50 02/13 87.95 83.00 90.50 closed n/a (0.45) ($68) $13,125
  Exited trade as stock showed no signs of following through lower
SCCO long 425 02/14 32.66 02/14 31.91 37.27 31.50 closed n/a (0.75) ($319) $13,881
  Cut trade on follow through below ascending trendline
TOTALS: 0 open shares (open capital committed doesn't include closed trades) $0.00

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 | 2/15/2012 10:15:18 PM | 0 Comments