Hey jeff, played perfectly with that bounce right up to 2810 on the sp500. I've added SKX Jul 35 calls for today with its report due out in the after hours. I'm using the profits from EBAY this morning to play this trade, so there's no additional risk. I've also added NFLX Jul wk4 360 puts here looking for NFLX to fall back and test the earning lows.
It was a decent bounce, but the SP500 never got past the Pivot Point (brown line, Neutral Point) before retreating back to the convergence point of the 400ma (grey line) & S2 (Pivot Support 2 bottom green line). It closed above 2800, so that's good, but I still believe we are having a bit of a resistance here at 2800. SP500 2 Days, 5 minute candles, 400ma (micro trend) & Pivot Points --------------------------------------------------------------------------------------------------------- Since early April the SP500 has gone up in waves each month, which was a more typical pattern of the 1990's. We are in the 4th Wave now. Good individual monthly rallies and retracements. Higher Highs and Higher Lows (the definition of an uptrend). These type of patterns (Waves) is the only way my trading system makes money and this has been a really good year. Daily Candles, 6 months, 200dma.
OI, this story came out around 12:30pm to 1:00pm today. Look what happened after the story broke, on the 5 minute chart above from 1:00pm (13:00) to the closing bell. Trump 'not happy' with Fed interest rates Washington (AFP) - President Donald Trump criticized the US central bank in comments aired Thursday, saying its course of interest rate increases counteracted his efforts at growing the economy. The rare rebuke was likely to stir a backlash, as it broke with the long-established practice of the executive branch not commenting on the Federal Reserve's decisions out of respect for its independence. "I'm not thrilled," Trump told CNBC in an interview excerpt aired Thursday. "Because we go up and every time you go up they want to raise rates again." "I'm not happy about it. But at the same time I'm letting them do what they feel is best." A Fed spokesman declined to comment on Trump's remarks but referred a reporter to comments Powell made this month in public radio interview in which he said he was "not concerned" by any threat to central bank's independence. Hoping to keep a lid on inflation as the world's largest economy gathers pace, the Fed has raised its benchmark lending rate seven times since 2015 and expects two more rate hikes this year. Doing so slows growth, as it raises the cost of borrowing, but can also prevent runaway inflation from damaging the economy. Trump said higher interest rates left the United States at a disadvantage when compared to the European Union and Japan, where easy money policies persist. The dollar index turned negative following the release of Trump's remarks, which were excerpted from a longer interview due to air Friday morning. - 'Couldn't care less' - The Fed is now chaired by Trump appointee Jerome Powell, whom Trump described as "a very good man." Economists say state intervention in the affairs of central banks can have disastrous consequences, leading to hyper-inflation and devalued currencies. Trump has taken credit for robust US economic performance since his election and championed December's sweeping tax cuts. But, with unemployment at historic lows and inflation on the rise, Powell has said the US economy is strong enough to weather the interest rate increases. In congressional testimony this week, though, he expressed concern about Trump's confrontational trade policies. A number of factors, including inflation and higher interest rates, could soon counteract the fiscal stimulus, however, and economists say the risk of recession in the coming years is growing. Trump said he was unconcerned that his remarks might spark criticism as he was merely stating long-held personal views. "So somebody would say, 'Oh, maybe you shouldn't say that as president.' I couldn't care less what they say because my views haven't changed," he told CNBC. "I don't like all of this work that we're putting into the economy and then I see rates going up."
That second chart is the reason I keep coming back into the market. I saw that Jeff, Trump trying to push the FOMC aside too now. I tried to stay out of politics, because there's too much circle jerking around here. I think that news and the statement from China in the afternoon pushed the market a step lower. We should at least hold onto this level tomorrow as MSFT is up in the after hours on a solid report and should test $110. It is Friday though, so there's still a chance of a wild card from Trump's tweets. But fundamentally, I believe earnings are pushing higher this quarter. I figured MSFT might not have much of a move, so I went with the more volatile SKX and I am going to take a hit on that one tomorrow. Other than that I've got nothing else that expire tomorrow. And Jeff, I bet that bounce this morning on your signal would have made for one hell of an intraday trade on the SP500 futures.
Expected to take the -800 loss on SKX. Added MSFT Jul wk4 107 calls right now, I'll update once I'm fully into the position. Also added AMZN Jul wk4 1850 calls. Those expensive calls suggest earnings next week so I'm prepared for that. Overall, I locked in $14.3k in gains this week (including the expected -810 loss on SKX). I was also able to add to my NFLX 360 put position averaging down.
Today is Option Expiration Day and many times the markets finish the day Neutral on the 3rd Friday of the Month (expiration for monthly options). My 2 day, 5 minute chart with the 400ma & Pivot Points has a tendency to agree with Neutral. In Pivot Point Chart training, which floor traders have use since the beginning of time, Where ever the one hour (twelve five minute candles) close occurs, the market has a tendency to close the day approximately near the 1 hour closing price of the SP500, 65% of the time. Today the 12th five minute candle closed on the actual Pivot Point (neutral brown line). So price may bounce around a bit today, but there's a 65% chance the end of day will be near the brown line (Pivot Point) and a 35% chance it doesn't.
I wouldn't bet against the sp500 closing at breakeven at all. I was also able to average down on the NFLX Jul wk4 360 calls to just under 4. Also added DPZ Aug 280 calls. Read through the earning report and I liked it. Nothing wrong there, plus it's clearly leading the pizza sector lol. I was looking for a follow through on the selling, but that didn't happen so now this level should hold and I'm looking for a rebound back above $290.
Also avged down on AMZN Jul wk41850 calls too. I think that's it for the week unless the market swings out of today's trading range. For the weekend, I'm holding MSFT Jul wk4 107 call avg 1.29, AMZN Jul wk4 1850 calls avg 37.56, NFLX Jul wk4 360 puts avg 3.87, that GOOGL 1200 calls still hold, and 2 Aug expiration positions in ADBE 255 calls at avg 5.17 and today's DPZ Aug 280 call at avg 7.24. I made 5 earning trades (not counting NFLX because also traded it post earnings) and finished with 2 winners/3 losers. Avg win was +2557 and avg loss was -918. I'm going to keep track of this because I want to make more of these earning trades next week.
I noticed you do average down, any reasons you do that? Most ET expert traders said averaging down is a no-no, for losers.
I average down a lot because I learned a while back that I suck at picking a bottom and it feeds my impulse. So every time I'm about to jump into a trade, I'll start with a small position and then average in as I see it well below my initial entry. That's just one of the thing I've learned while reviewing my trades. I've noticed that every time I enter a position, I'm always in at a much higher price. And just like that I averaged down again on some of those positions especially AMZN and MSFT calls. I believe the SP500 stayed no more than +/-5pts from breakeven all day.