Ambush trade – Hubert Senters

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Ambush Zone

Tonight Hubert filled in for John.

Economic situation for tomorrow:

7:45: ICSC – Goldman Store sales 8:30: PPI 8:55 Redbook 9:00 Treasurey International Capital 10:00 Housing mrkt index 1:15 Ben B. Speaks 6:30 Dennis Lockhard speaks

Intraday Analysis:

There was a good sized gap down this morning which never filled. At the open, bears were in control. The EDX got as high as 45 and stayed nearby most of the day. Hubert points out that we are in an ambush zone.

In last night’s member video, Hubert talked about shorting the Dow. On a daily chart, he identifies points 1, 2 and 3 as well as the 50% retracement level. The 50% level is the ambush zone, or area of resistance. We want to short at that level. However, if a market goes above the 61.8% level, we stay away. This is not a trend trade but rather a channel trade. We are playing the market as it ping and pongs and tries to figure itself out.

The same trade could be placed in the S&P. The Nasdaq, however, has crossed its 61.8 level. In this case, restructure your Fibonaccis so that 2201 is your 50%, and look for a pullback to that level. The target is the most the recent high of 2428. The Russell has not reached its 50% level so we pass.

Bonds have chopped around. Hubert’s recommendation is to get long at 140 26/32 and short at 137 14/32. If entering a position in one, use the other as a stop.

Crude is nearing a potential ambush. If we get above 88.08 and no higher than 91.11, it represents a potential short. Aggressive traders might have shorted today’s tick at that level. If so, your target is 81.26.

Gold is weaker than stronger. It is forming a Lazy-h, meaning it should continue lower before spiking up. Hubert looks to sell gold at 1725 or on a takeout of the recent 3 to 5 day lows. Target is 1550. If it ticks below that, he would reverse and ride it back up. Overall, gold is weak.

AAPL has an unfilled gap on the daily chart. But even with the rest of the market down today, it failed to fill. The price action on AAPL signals a stock that is resiliant.

GOOG has filled half a gap. Hubert thinks it will fill the rest. On a swing basis, you could get long with your first entry at the 50% level (579.35) and your next at the 100% level (559.48).

There is no trade in AMZN until it breaks above 250.

John Carter is the author of Mastering the Trade and co founder of Trade the Markets. John Carter has been featured on CNBC, Bloomberg, Fox business channel, tastytrade radio. He is a contributor to thestreet and SFO magazine.

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