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. The S&P 500 Index (SPY) came within 0.13 of 2011 highs yesterday. In light of this, our search for stocks that have a higher probability of moving lower with a broad market pullback continues.

We have added Broadcom (BRCM) to the short trade idea list in today's Bulls and Bears section. Like the broad market, BRCM is also approaching 52 week highs which should act as resistance and a point at which the reward to risk ratio is in favor of a short play. Interestingly, BRCM is found among the list of stocks below that saw the greatest amount of money outflow yesterday.

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.

Breadth of the ShadowTrader Sectors was mixed yesterday with 11 closing higher and 14 ending lower. Three sectors have closed higher for the past four trading days. They are XBD, CEX and TOB.

The ShadowTrader Sector Trend Score short term bearish signal for the broad market is active through the end of trading on Thursday.

This indicator has been correct 23 of the last 30 signals as a predictor of a forthcoming short term move by the broad market. An indication is credited as being successful if within three trading days of the alert, the SPY closes below the closing price of the day the alert was triggered (Friday).

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