Karpel’s Corner: Playing the Swings

Welcome to Karpel’s Corner. This is where I throw out my thoughts on the markets and share some of my favorite strategies. I keep it market-focused, and never miss an opportunity to teach trading strategies and commentate on the latest trends affecting the financial markets. Hope you enjoy today’s post!

The S&P 500 ($SPX) bounced yesterday but was not able to break and settle above long-term resistance at $1900. The $1900 level is the 200-day simple moving average.  Up until the last two sessions, that level was support but now it is resistance. A break and settlement above $1910 would make the recent pullback a trap for the bears.

Tech stocks were underperforming well before this recent pullback in the S&P 500, but we see tech holding up much better the last few sessions. We have seen strength in Apple ($AAPL) but weakness in Google ($GOOGL). The Google breakdown is a concern since this big tech name has been underperforming the market since the summer.

We are looking for some swing trades in regional banks ($KRE) and the micro-caps ($IWC). Regional banks have been trending down since the spring, with bounces in April, May, July, August and Sept. Could these new lows mean a swing set up to the upside?  A bounce off $36.75 with resistance kicking in at $39.5 would do the trick for $KRE.

Finally, we discussed energy this week on Tradespoon TV. We’re seeing natural gas testing lows we have not seen since August. If the December natural gas futures ($NGZ14) break $3.9, this would be a flag for continued pressure to the downside in this commodity. Some of you may not have access to futures, so you can look at the proxy ETF $UNG if you want to track the action of natural gas. 

See you next time at The Corner!