Long Put Options – Directional Strategy
In this E-Learning call we dive into the Long Put Option Directional Strategy details. We also cover the trade setup and the chart patterns that produce high probability directional put positions.
Massive Whipsaw
After hearing the FOMC would take more of a wait and see approach to interest rate increases the indexes found support and producing a massive whipsaw rally. The QQQ managed to fill the gap while the DIA, SPY, and IWM fell just short of accomplishing that task. Unfortunately, the current Dow futures are pointing to another triple point gap down at the open as program trading continues to wreak havoc with massive volatility.
Congress did manage to avoid a government shutdown tonight but only kicked the can down the road for couple weeks leaving a big cloud of uncertainty as to what happens next. Additionally, trade negotiations between the US and Canada and the threat of a yield curve inversion add density to the uncertain clouds as we head into the weekend. Consider the massive volatility and the daily gaps as you plan your risk into the weekend.
On the Calendar
For the last trading day of the week, we have just 17 companies reporting earnings. Although the 4th quarter earnings events continue to wind down, we must remain vigilant checking report against current holdings.
Action Plan
After an ugly gap down yesterday markets managed to hold at key support levels after hearing that the FOMC will adopt a wait and see approach in regards to new rate increases. Yesterday’s slow grinding rally came close to filling the gap in the DIA, SPY, and IWM while the QQQ filled the gap and demonstrating the volatility remains very high. Unfortunately,the current futures market is pointing to another gap down around 100 points.
With so much wild volatility retail traders have much take a moment to think about the risk they carry into the weekend. Clearly, anything is possible as index and quant fund automatic trading algorithms continue to thrash market confidence. As for me except for the possible quick intraday trade I’m content to wait for the market to gain some stability. Weigh your risk carefully as the weekend nears and remember cash is a position often underutilized in times of such market turmoil. Have a great weekend everyone!
Trade Wisely,
Doug
SPY Found Support For Now
The SPY found support and worked itself back up above the T-Line Bands but still controlled by the bears. Price remains below the 200-SMA, and the 50-SMA is kissing the 200-SMA. I have found when the market is in rough waters, and the sellers are the captain of the boat. Longs are only good for very short term relief rallies. The short trades seem to be better, but they are a bit shaky at the moment. The good news it’s Friday, and we get to count our money! Remember cash is a position.
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Rick uses three main trading tools and has dialed them in for max performance. Rick also freely shares his insights on what makes the tools the best and how to use them. Rick is also one of the only traders in the industry that shares his trading account. Traspaerancey and Trading Results.
DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from us should be considered as financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates or representatives is intended for educational purposes only. You are advised to test any new approach before implementing it. Past performance does not guarantee future results. Terms of Service
Hanging Man Confirmed Tuesday
Hanging Man Confirmed Tuesday
Tuesday we saw the SPY sell off confirming the Hanging Man Candle and another failed attempt for the bulls to control price action above both the 50 and 200-SMA’s. The futures this morning will be punishing most long positions held. Taking a look at the weekly SPY chart, I can see a tight nasty Blue Ice Failure set up, (keep in mind follow-through is required). 2016 was the last time price action of the SPY was near the 200-SMA on the weekly chart, and it’s starting to look like a future test is in the game.
(BAC) Weekly Blue Ice Bearish Engulf
The weekly chart is showing a Bearish Engulf and a Blue Ice short set up which could be pointing price to the 200-SMA or about $21.70. We are adding BAC to the LTA-Live Trading Alerts Real Time Market Scanner watchlist for management and buying alert. I will consider BAC Jan 18, 2019, $28.00 PUT.
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362% November Statement
Rick uses three main trading tools and has dialed them in for max performance. Rick also freely shares his insights on what makes the tools the best and how to use them. Rick is also one of the only traders in the industry that shares his trading account. Traspaerancey and Trading Results.
****VXX – Bullish Morning Star closed over both the 50 and 200-SMA
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Trading at the Beach • How to set up the T-Line Regression Lines • MetaStock Automated • Trading the T-Line Trap • Shorting the Blue Ice Pattern
DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from us should be considered as financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates or representatives is intended for educational purposes only. You are advised to test any new approach before implementing it. Past performance does not guarantee future results. Terms of Service
Grinch Who Stole Christmas
Grinch Who Stole Christmas
US/China trade war concerns, sharply falling oil prices and the arrest of a Chinese tech CEO may have combined as the Grinch Who Stole Christmas. Asian stocks declined sharply overnight, and European markets are currently sharply lower across the board this morning. As a result, the Dow Futures are pointing to 400 point gap down at the open. The market hates uncertainty, and until we get some resolution on some of this politically generated uncertainty, this roller-coaster ride of market volatility is likely to continue. It seems hard to believe that it was just Monday we were looking futures gaping up 450 points.
Remember when the market is thrashing around like this you are not required to trade! As a trading coach, I’ve talked with a lot of traders that wish they would have taken the month of November off because it would have saved them a bucket load of capital. Only trade when you have an edge. If you are consistently losing money stop trading! The market will eventually calm down, and your edge will return, but if you lose your capital to this very emotional market, you could be out of business before that happens. It’s not personal its business and you have to know when the risks are just too high. Stay calm, disciplined and focused on price action.
On the Calendar
On the Earnings Calendar, we have 57 companies reporting results today. Make sure to do your due diligence.
Action Plan
This morning we face a very ugly market open, and it looks as if the Grinch really has stolen Christmas this year. On Tuesday the 3-year bond yields rose the 5-year yield which is known as a yield curve inversion. Although the market reacted in a very negative way, typically a true yield curve inversion requires the 2-year bond yields to rise above 10-year which of course has not happened as of now. The US/China trade deal may have just become much more complicated as the CEO of a China tech company was arrested in Canada at the request of US. Also, this morning oil prices are sharply lower as OPEC production cutbacks were less than expected.
While it may seem like the sky is falling this morning, we must say calm, disciplined and focused on price action. We have a huge economic calendar today that could easily improve the or worsen the situation throughout the day. However, if we become compromised emotionally, then we risk missing out on the potential opportunities that could occur. Remember the high gap up on Monday found no buyers after the open. We must stay focused on price action waiting to see if the bears pile on after the open supporting the gap down or if the bulls step to defend price support and gobble up the bargain prices.
Trade Wisely,
Doug
[button_2 color=”green” align=”center” href=”https://youtu.be/cTeVAvgpNyw”]Morning Market Prep Video[/button_2]
Gap Fill?
Gap Fill?
Sadly yesterday’s hyped up big gap unfortunately and not that unsurprisingly found profit takers and raising the concern of an immediate gap fill. In Monday’s morning note and market prep video, I cautioned about the possibility of a pop and drop pattern. I received a lot of comments and emailed about making a great call, but please understand that was not a prediction. It was merely an observation after an unbiased study of the index charts.
Believe me; anyone can do what I do if you study the chart for what it is rather than what you want it to be. All you have to do is remove your bias, set aside your emotion and focus on the clues left in the price action of the chart. Today, with the market pointing a triple-digit gap we once again must be careful not to chase. Watch the price action a see if the bears pile on after the open supporting the bearish gap or if the bull set up to defend price support. Keep in mind; the market closes Wednesday for the national day of mourning and Friday night the government faces a shutdown. Plan your risk carefully as anything is possible with the market re-opens Thursday morning.
On the Calendar
On the Earnings Calendar, we have just over 30 companies reporting this morning, and there are 25 on the calendar reporting even with the closed on Wednesday.
Action Plan
Despite all the morning hype surrounding the trade negotiations and resulting in huge morning gap, the market found mostly sellers after the open. They are following through with that sentiment this morning with the futures pointing to 100 point gap down and opening the door for a possible fill of yesterday’s gap. With the market closed on Wednesday for a national day of mourning the possible government closure on Friday night, the market is understandably pensive.
The market is also beginning to worry about the possibility of a recession as it watches for the possibility of a yield curve inversion. Although I’m expecting the market remain quite volatile, I would not be at all surprised to see the price action become light and choppy today as we head into the Wednesday closure. With yet another triple point gap we must be careful not to chase and wait to see if sellers pile on in support of the bearish gap or if the bulls set up to defend support levels after the morning rush. Remember anything is possible Thursday morning when the market reopens so plan your risk carefully.
Trade Wisely,
Doug
[button_2 color=”green” align=”center” href=”https://youtu.be/HugXDWqJldE”]Morning Market Prep Video[/button_2]
Challenging The W Pattern
Challenging The W Pattern
Yesterday the SPY added to it’s run by gapping over the 50-SA and challenging the top of the “W” pattern. By the time price got to the top it was pretty well run out. Bullish consolidation from yesterdays high to the 200-SMA would be a bullish pullback. Below the 200-SMA would suggest the sellers are outsmarting the buyers. Yesterday was a big day for our members, gapes are gifts, and a lot of gifts were had yesterday. This market continues to face a huge headwind, trade with your eyes open to spot the clues.
LTA Real-Time Market Scanner
Today we will be using the LTA-Live Trading Alerts Real Time Market Scanner to find tradable charts. The LTA Scanner is a tool to find Candlesticks signals and chart patterns in real time. For over 20 years I have used a real-time scanner, and the results show.
****VXX – The VXX chart has found what could be a bottom, the question now is what will price do with it?
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Rick uses three main trading tools and has dialed them in for max performance. Rick also freely shares his insights on what makes the tools the best and how to use them. Rick is also one of the only traders in the industry that shares his trading account. Traspaerancey and Trading Results.
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Free YouTube Education • Subscription Plans • Private 2-Hour Coaching
YouTube Videos
Trading at the Beach • How to set up the T-Line Regression Lines • MetaStock Automated • Trading the T-Line Trap • Shorting the Blue Ice Pattern
DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from us should be considered as financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates or representatives is intended for educational purposes only. You are advised to test any new approach before implementing it. Past performance does not guarantee future results. Terms of Service
