Nasdaq (QQQ) Breakout Underway

I'm now bullish on the Nasdaq (QQQ) after the breakout of the range. I have been waiting for the market to breakout or breakdown from the trading range. That move finally took place with Nasdaq breaking the high around $55.70.

I will view the next pullback as a buying opportunity for a swing trade. The pullback must stay above $52.50 that will create a higher low in the chart. A swing trade is a trade that lasts several days.

The blue arrow shows Nasdaq breaking above the 200 daily MA as well as breaking above the trading range of the last few weeks. I like the fact that the QQQ's have created a higher low with each pullback.

 The weekly chart shows how Nasdaq has held up during the last pullback near the $50 support area. I like how the market has held up in an area that was a prior resistance point for the market. Whenever a resistance point is broken, it often turns into a support area. If Nasdaq (QQQ) breaks above the $60 area and holds, I will look for further gains. I will look to move my long term portfolio back into the market at that point.

Market Is Looking For Direction

Nasdaq

The QQQ's has failed to find a direction in the market and continues to be rangebound. I'm still leaning bearish but I'm not yet ready to commit to long term shorts just yet. I want to see a breakout or breakdown before I commit to a bias.

Support is the $50 area and resistance is at $55.50, I want to see a daily close above or below for me to consider that area to be broken. I marked the key areas with green arrows.

European concerns are still a drag on the market and could finally push the market enough to breakdown. I recently moved 70% of my long term portfolio into cash (Composed of 50% T-Bills/50% TIPS) to position for a move down. If the lows break I expect a large move down which could take us to the $44 area in the QQQ's.

Europe is in a tough situation which I don't think will end well. EU has yet to agree on terms on how to handle Greece's bailout situation. If the EU were to fail to agree I could see risk off trades back in play which could lead the metals higher once again. I will keep an eye on this situation to look for opportunities to trade.

Avon

Our Avon (AVP) trade is still in play but is real close to stopping out. Normally I like to see a bounce occur much faster, but the market has been pretty choppy last few days.

Position Update

LULU

If you took the LULU trade you got stopped out when the stop got taken out.

AVP

AVP stop held in and is still in play. AVP is trying to break the most recent high and if it gets taken out we could see the $24 area.

LULU Second Move Down

Looks like we are getting our second move down on LULU. I have been bearish on LULU and think they still have a long way to go down. You can read my write up, Lululemon look out below. What I don't like about this setup is you might run into the 200ma which may become a support so if it can't break that  moving average, take the position off. You could use $53.52 as your stop if you want to try a short. I think I would take some off if I could get 2X my risk and as usual I will trail with a breakeven stop once I'm up $3 on this stock.

LULU was once a high flyer on wall street and any time the market realizes that growth will slow down the stock is usually severely punished. I think that same thing will happen to LULU.

Apple Profits Booked

The Apple trade worked perfectly as expected. I felt the selling was over done and if you followed our plan you would have made money. Apple opened alittle above the area we wanted ideally but you could have entered on the breakout in the $360 area. You had to enter in premarket trading in order to get in. Here is Apple premarket:

Apple traded as high as $375 way past our minimum target.

I don't think we'll get a trade in Apple like this again for a long time. This is one of those rare instances where the market was completely over reacting and astute traders could take advantage of it.

Apple sell off on Steve Jobs news, great buying opportunity

Apple sold off as much as 7% in after hours trading on news that Steve Jobs is stepping down as CEO. It appears the fears may be a bit over done and I think you could take advantage of a gap down into support on Apple. I will look to buy one lot of Apple on a gap down in the $355 down to the 350 area. I would buy two lots of Apple at the 200ma which is around $343. I will also look to add on a buy setup if I get a good buy pattern. I will use the $339 area as my stop so be sure to position size correctly to your risk. I would like to see support first before buying if we gap below $350. This trade is also invalid if it trades below $339 before we are able to buy. I marked support and buy areas with green arrows.

If we get a buy from the $350 area, I would like to target the $360-365 area. Be sure to properly trail the position and move stop to breakeven once your 3-4 points in the money.

AVP near 20ma target

Our AVP trade is doing well heading towards our 20ma target. If you used a tight stop under $21, you would have gotten dinked out on the failure to hold above the 8ma. If you used the $20 stop, which is the low of the pivot, you should still be in. AVP came close to breaking the low but it held in.

The 20ma should be a good first target but I think there is more room to run if it could break above it. I'm not gonna give AVP to much room because of the volatility in the market. I would take at least a third of the position off on a test of the 20ma and move the stop on the rest of the position to breakeven.

I will also move the current stop to 20.47 to tighten up the risk. I marked the stop loss area with a red arrow in the chart.