I was initially quite nervous about trading into an over-extended market this week because the SPX is trading at all-time highs (which it closed above on Friday). Since the Nasdaq (QQQ) and Dow are in different situations, I’m not quite as worried. While the QQQ is also trading just above an all-time high, the previous high is only a month old and the chart seems to indicate that this is more of a continuation of an up-trend. The SPX broke a high from January last week. The Dow is still well below the January high and is the weakest of the three.

For this week’s trade, I’m watching AVEO. It has been in a solid uptrend for the last couple weeks and I don’t see much resistance until ~$2.85. If the market is strong, I’m willing to buy this at (or before) the open near Friday’s closing price of $2.62. I will close the trade before $2.85. I’m setting a hard stop at the 5-day SMA line ($2.42 currently) but I may sell sooner.

Watch the IBB this week (This is the NASDAQ Biotech ETF). It is near resistance (previous high of $120.06). If it breaks this level, then this should mean good things for my AVEO trade. If it hits this level and can’t close above it, then I will reassess my position.