Have order working to buy SPY 5, 1/2/1 Aug-24 286/287/288 Flys at .20. Been working for a while. Not going to chase. I'm thinking SPY will hold the low of the week and will slowly work higher by the end of the week. More interested in buying EEM tomorrow if positive price action at the open and no big gap up. If TSLA had better fundamentals, I would have considered trying to catch a falling knife with the juicy markdown at the opening. I prefer to short stocks with weak fundamentals after strong short covering. No day trade today. Money flows started out negative, but volatility was declining. There was no compelling reason for a trade at the open or even to consider my threshold indicator. The scalpers probably did well, however. Fly order cancelled at 4:03 PM ET on SPY sell off. May get better pricing tomorrow near open.
Solid, positive movement overnight to risk based assets. Going to be long for long entries are n ES and its related derivatives. We may get a trend day. Debating between buying the open of RTH waiting or waiting for a threshold buy signal. Either way, will be looking for the overnight high on ES to be tested and eventually exceeded today.
No meaningful correction so far. Looks like no trading for me today. Off to work. Definately will be studying option strategies. Some strategies offer incredible risk to reward and have the benefit of less minute to minute management of the position.
Today is apparently FOMC minutes day and the convictions of several Trump associates and related news and commentary fallout throughout the trading day is likely to cause several sudden price spikes in both directions. It might be appropiate to wait for a price spike and trade for quick reversal scalps. Longer term, it is hard to tell which side to be on. Currently, the economy in the United States is very strong. China and US trade talks are back on and this should provide some encouragement for risk taking. The Summer trading slowdown should be nearing an end soon. It is almost a certainty there will be a particularly contentious Midterm election cycle for the US. A battle over Federal spending in the US will likely be even more polarized than usual over extreme partisanship. I will maintain a modest bullish bias on US Equities, but will be alert for any news related opportunities. One thing seems nearly certain: Volatility should rise significantly during the next few months. Will likely stay out of the markets for today because of work requirements.
Things have been crazy busy at work. My already very satisfactory earnings rate looks like it is going to double for the foreseeable future. The cost, of course, is there is less lime to do other things, such as market analysis, short term trading, and posting. Perhaps when I have time to trade again, my account will have been upgraded to a portfolio margin account. Although I am unlikely to be able to post during the week, I hope to be able to use part of my "recovery" Sundays to post general ideas on trading. I believe there is a lot of good information in daily candlestick charts for daytraders and weekly candlesticks for swing traders using options. The previous day's and week's high, low, and close tend to be significant support or resistance zones. Round numbers and intraday highs and lows also have been known to be meaningful support and resistance areas as well. When combining the general principle of "Trade in the direction of the opening indicator" with sentiment analysis such as money flows to and from risk based assets, put to call ratios, and market sentiment statistics, one should be able to construct a sound trading plan for a day trade. By trading in the direction of the open, I mean to favor long entries when the daily candle is green or favor short entries when the daily candle is red during the regular trading hours of the session you are interested in. There appears to be solid statistics to support this idea. Look at daily and or weekly charts and consider the open to close range (candle body) as well as the wick by the opening end of the candle. One can also download open, high, low, and close data into a spreadsheet and analyze it that way. However, when there are significant gaps, one must exercise judgement weather to trade in the direction of the gap, fade the gap, or wait. This takes experience where one would consider the context of the underlying trend on the daily chart, if any. For example, let's say a daily chart shows generally rising prices with several days of narrow range price declines. On the current trading day the issue gaps up. The odds generally favor paying this markup for a rally to test and perhaps eventually exceed the previous high of a few days ago. Use the opening indicator as a guide for timing your trade. Now let's say prices have been in a strong uptrend for a while. On the current trading day there is a large gap up. If prices trade below the open and one has the discipline to excercise money management should prices trade back through the open by a meaningful amount against their position, there is a good chance prices will "fill the gap" from the previous day. The opening price can act as a pivot and putting stops a little distance beyond the opening price can be an effective trade management tool. I am also exploring option trades for swing trading. These strategies focus on the current week and thus use options that expire and the end of the current week. I will be looking low initial delta strategies with theta decay and gamma considerations as appropiate to my underlying expectations for the week. The could involve outright long options or some type of option spread such as verticals, butterflies, ratio spreads, and strangles or straddles. I believe the greatest "efficiency" of a option trade is obtained when it's PnL curve profile is similar to a probability bell curve as adjusted to one's statistically validated trading edge.
Planning to be a little naughty today and get a late start to work in order to do a some trading. The Mexico and US trade agreement is of course a positive development as it reduces uncertainty that may have been overhanging the market. My understanding is that Canada and the US will be talking and in my estimation will likely reach an agreement as well. It may turn out that trade agreements between other countries and the US may snowball as it is unlikely anyone wants to be odd man out because over time, tariffs may slowly divert trade from non agreement countries to lower cost producers that have an agreement in place. The countries that do have a trade agreement under this scenario will likely see a good boost to their economy. The reduction in trade uncertainty should continue to encourage risk taking. Although the market has priced in a lot of this good news and probably expects more positive trade developments, I believe there is still more upside, especially in smaller cap stocks. The US economy is strong and increasing need for additional capacity will likely create opportunities for smaller companies. Although I wish industrial commodities were stronger, I will be looking to scalp IWM this morning from both sides. I may build a small daytrade position as I scalp in and out. I am using the term scalp loosely here as my trade criteria today weighs other criteria more heavily than immediate order flow. For my "scalps" on IWM, I will be using a stop level of between 20 and 30 cents, depending on time of day with a similar objective of a RR of 1:1. My profitable trade percent objective is 67%. On shares of IWM accumulated for daytrading purposes, my objective will be yesterday's high.
No trades yet, but it looks like IWM is now below the open again and has a lower high on the 5 minute chart. Looks like a short to me. Have to start work now, so no trades for me today.
Bought 100 EWZ at $32.2785. Stop is $32.15 and target is high of day. EWZ is below open but has some momentum. We'll see how much risk taking there is today at n developing country ETFs. Out at $32.2516 on disappointing Bid support and lack of relative strength to ES and CL rallys. The short term short the market idea is looking more and more compelling right now on negative money flows across various asset classes. ES at RTH low of day.
Bought 100 VXX at $29.03 with stop at $28.85. Objective high of day at $29.22. Stop raised to $28.95 due to time stop. Stopped out at $28.95. Although VXX is being a bit "sticky" and holding up well to an ES rally, the fact ES when through short term intraday resistance gave me pause. Looks like VXX is recovering and is now back to my entry price.