Swing Trading & Market Outlook

[Albertgax]

Good day, we represent a team of traders who contribute frequently on online forums and social media. We will have fortnightly reports detailing the global market outlook. This gives us an overview of various equity markets, with the US stock market being the main focus. In addition, being primarily swing traders, we will occasionally write up on stocks that are poised to move.

Our First Post

This week has been an exciting week for us down at the office as our earnings playbook was working overtime. More than half of our stock picks for this week have earnings that are due this week or the next. Let's do a recap on those that have already released earnings and how they fit into the overall trading strategy so far.

Recap
FB, CMG - Gapping up at the start of today's trading session on earnings beat is good for investors and the stock price certainly reflects this. Not chasing after these tickers in light of good fundamentals but saving our guns for those which breach our breakout level post earnings.

TRIP - An earnings miss in TRIP leading to a 9% gap down in this stock at the start of today's trading session despite having a well established short term base at 100 and pre-earnings move above our breakout level at 106. A clear example of why we don't jump into a trade solely because of technicals.

Upcoming plays

TWTR - This social media ticker has had an outstanding run in the first 2 months post IPO. With the momentum quickly dying off, the first half of this year saw Twitter quickly pulling back below IPO pricing before finding ground at 30. Volume has started to return to Twitter since May, and a short term base is now formed at 36 which is supported by the 50-day moving average. With earnings round the corner, we shall be looking to position ourselves in TWTR at breakout level 39.40-40

[AlexxissFex]

Among some of out stocks to watch this week was JD. Promising setup but bearish indication from the market prompted us to stay away in the meantime.

http://onlinetradersforum.com/attachments/2nvqebr-png.37939/

[Alealokato]

The outlook for the Euro zone remains largely unchanged since the ECB’s last meeting, except the announcement that the ECB’s Asset Quality Review (AQR) and stress tests will be released in October with the test guidelines in August. Without doubt, Euro zone bank shares have been largely in decline over the past several months in anticipation of the possible capital raising required should some fail the tests. As such, with the tests now approaching, we will likely begin to see strong banks begin to price this in and start to appreciate over the near term.

Economic data in Europe appears to be gradually weakening, in line with the weakness seen in the US in Q1, with industrial production contracting, inflation remaining consistently low and PMI numbers disappointing in early July. The numbers for Q2 will be hugely important in deciding if the Euro zone faces a risk of sliding into recession again. As such, a weakening of the Euro would be forthcoming given the increased prospects for QE by the ECB to boost growth. Conversely, should the Euro area economy strengthen and the Euro advance, this too will likely prompt action by ECB head Draghi who has consistently mentioned the exchange rate as “being key driver of future inflation.”

[alkuqvdgzzqk]

Friday's strong action in leading averages suggest that recent sell-off is likely to find footing at these levels while positioning for a rebound. The strongest of the lot, the Qs are currently holding its 50day moving average and appears primed for recovery. Meanwhile, the action in leaders such as FB, TSLA, NFLX, BIDU continue to remain strong which supports our view that the worst of this recent bearishness might be over for now.

[Alfredokivy]

The divergence between large cap S&P 500 and Dow indices, and the small cap Russell indices is currently at an important juncture for several reasons. Firstly, all three indices appear to have made an important bottom last week and the type of resultant rally from here is crucial if all are to advance further. Secondly, the most important Nasdaq index is holding up the strongest, having remained above its 50dma and is now targeting new highs, thus the other indices will have to catch up for the bearish divergence to be removed. Thirdly, internal indicators such as the action of market leading growth stocks are currently very constructive; hence the indices are primed for a significant move from here.

Interestingly, since Yellen’s valuation comments recently, the very same stocks and sectors are currently performing the best, with action among biotech and internet social media stocks very constructive as mentioned in making large advances this week. This helps to resolve the internal weakness in the equity indices mentioned last week and if sentiment continues to improve, we might see stocks make a large advance over the coming months.