Episode 1 - Act 2

Today we embark upon a journey. All major indexes made new highs today, doing so in the pre-market hours, and then crossing up again shortly after the market opened. Thus, I just completed the shuffling around of funds in my accounts. All that's left to do with the 401K now is to manage responsibly. I am prepared for all scenarios, I've done my homework, it's up to the market now, and its behavior with time and price. Below is a shot of the DOW daily, which actually has even better Reward/Risk than the S&P.

 

In light of the potential short term up trend in the indexes, there ought to be some stocks now that are setting up for the long side. Last night in the mentoring, we ran a scan for Type Two Buys, and came up with over 50 results. We did not go through them all, and we won't here in this blog either. :) I'm just letting you know they are there!

Aside from the typical Type Two setups, there are some stocks that are already on to the NEXT phase of the progression of the trade. We found two last night that have really nice XTL Breakout setups. Lets start with Portland General Electric (POR). Yesterday was a very nice XTL Blue breakout. The interesting thing about this stock is that it was recently a Type Two buy as well. Today's bar is starting out RED, which may negate the XTL breakout. However, for the time being, the trigger is at $17.60.

 

The other stock is URS Corp (URS). This stock is interesting in that it was recently (relative to a WEEKLY chart) a Type Two buy on the Weekly time frame. This was followed up by a surge to the top side, proceeding into a 62% retracement. That was all typical of Wave 1 and Wave 2 behavior. You can all count, so you know what comes next, right! :)

 

The Daily has had a pretty wacky ABC pattern for awhile, but the Weekly picture makes up for the Daily's lack of direction. The XTL breakout that showed up yesterday gives us a trigger at $39.73.

 

As this turn around in the overall market develops, there should be more and more opportunities like this. Keep your eyes peeled, and, as always, BE PREPARED!

Nate McCartney

Comments

[David]

Hi Nate, there is a notion out there that in daily chart wave 5 is not complete; what we are seeing is subwave 3 of 5, and there is going to be a subwave 4 up and final subwave 5 down completing wave 5 in daily chart. I wonder what you think about it. Thanks.