Good Day Traders,
Overview & Highlights: In this edition of the Art of Active Trend Trading Trader’s Report the individual sections are rearranged and start with the Managing Existing Trades and Potential Trades sections. This reorganization puts the actionable updates for the Premium members at the beginning of the Trader’s Report. Hopefully the Premium members find this line up to be more efficient.
For the Premium members who are parallel trading Strategy 3 a new short video will be available on Monday, October 12th. This video will detail some adjustments being made to Strategy 3 that will reduce both catastrophic long-term risk and weekly risk. These adjustments have resulted from a review of all the trades made with the strategy and discussions with one of our members who provided additional risk profiles for the strategy. I’m pleased with the 75% win/loss ratio of Strategy 3 and know these adjustments will strengthen the strategy.
Webinars: At Active Trend Trading we offer two webinars per week to provide training plus trade and market updates. The Schedule is below for these events.
How to Make Money Trading Stocks will return on October 30, 2015. I’ll be on an airplane high above the Pacific the next 2 Fridays.
Next Training Webinar: October 14, 2015
For Premium Members our Wednesday evening training is developing some fantastic traders!
Mid-Week Market Sanity Check Topic: Simplified & Effective Stock Review
General Market Observation: Last week was impressive for the buyers in the market. Each of the Tracking Indexes continued in the current rally the started on September 29th. But while positive, Friday’s action showed some slowing as each of the indexes bumped their head against existing resistance. Our questions for this week, will we get a retracement and how severe will it be?
Over the next 3 weeks earnings will be the primary focus of the market. Some of the bigger names begin reporting this week and we will soon know if these bellwether stocks meet expectation.
As we discussed in Friday’s webinar the catalyst for the current rally seems to be the belief that the Fed will not raise interest rates until 2016. Under the hood economies around the world are unchanged from where they were 4 weeks ago. However if the expectations of enough institutions has been change to a more positive market outlook more upside may be in the offing. Regardless of the logic or lack thereof for the current rally, trying to argue with the chosen market direction is pointless and can be damaging to our health.
SPX: The S&P finished Friday with a spinning top Doji after testing resistance at the 100 day moving average. On the daily chart it appears that the S&P is primed for a retracement back to one of the levels of support such as the 50 day moving average. If Fridays candle does turn out to be a reversal signal then pay attention to where the 38.2% to 61.8% Fibonacci retracement dwells. On a longer-term chart the 8 week EMA also marks potential support at 1984. This level also coincides with the midsection of last week’s bullish weekly candlestick. Keep in mind that while we do not have a reversal signal at this point the SPX is up 8 out of the last 9 days. At some point the rocket fuel will run out and the upper momentum will stall at a significant resistance ceiling. That will provide additional clues to what kind of rally we are currently experiencing.
Preferred: SPY, UPRO and SPXL
NDX: It appears that the NASDAQ 100 is also running out of steam. Be aware of the three potential price actions that can be unfolding in each of the indexes. During 2015 each of the indexes have tended to get stuck in a trading range for several weeks before seeking either a slightly higher are slightly lower range to trade in. We know that the correction started the week of July 20th has been more damaging than the corrections over the past couple of years. At this point in the cycle the damages from July have not totally been worked off. While short time expectations in the market may be positive there is still work to be done before a full-fledged new uptrend is official.
Preferred ETF’s: QQQ and TQQQ
RUT: On the weekly Russell chart is a very good example of a Morning Star bullish pattern. Like the other indexes there still multilayers of overhead resistance to work through. Prices are pushing up against a significant resistance zone. On a weekly chart of Fibonacci retracement drawn high on June 22nd to the low the week of September 28th shows that last week’s price action closed above the 38.2% retracement. Stiffer resistance may be encountered around the 50% retracement at the swing high from the week of August 14 and the 40 week moving average converge. Friday’s intraday high and these other price levels provide identifiable resistance points where a potential downward reversal could commence. If price action approaches any of these levels pay attention for signs of weakness or candlestick reversal patterns.
Preferred ETF’s: IWM and TNA
The Early Warning Alert Service has hit all three major market trading point this year. See this brief update video for more details: https://youtu.be/PRLmPQLHjiI
If simplifying your life by trading along with us using the index ETF is of interest you can get the full background video at: http://activetrendtrading.com/etf-early-warning-alerts-video/
The How to Make Money Trading Stock Show—Free Webinar every Friday at 10 a.m. PDT. This weekly live and recorded webinar helped traders find great stocks and ETF’s to trade with excellent timing and helped them stay out of the market during times of weakness.
The “How to Make Money Trading Stocks” Show will be back on October 30th
To get notifications of the newly recorded and posted How to Make Money Trading Stocks every week subscribe at the Market Tech Talk Channel: https://www.youtube.com/channel/UCLK-GdCSCGTo5IN2hvuDP0w
- The Active Trend Trader Referral Affiliate Program is ready. For more information or to become an Affiliate please register here: http://activetrendtrading.com/affiliates-sign-up-and-login/
Index Returns YTD 2015
ATTS Returns for 2015 through Sept Oct 9, 2015
Margin Account = +8.5% (Includes profit in open positions)
Early Warning Alerts = 10.2%
Active Trend Trading’s Yearly Objectives:
- Yearly Return of 40%
- 60% Winning Trades
Early Warning Alert Target Yearly Return = 15% or better
For a complete view of specific trades closed visit the website at: http://activetrendtrading.com/current-positions/
Updated first full week of each month.
Outs & Ins: JKHY makes its debut on the IBD 50 after breaking out of resistance at 71.76. Volume on the stock is less than 500K per day which is a light for consideration. Counteracting this low-volume is a chart that shows fairly good patterns especially on a weekly.
The majority of the stocks on the IBD 50 have yet to report earnings for the 3rd quarter. Two notable members report on Tuesday AMC. These are HAWK and OZRK. Both of had a nice pre-earnings run. Stocks that look interesting to the upside if they will pull back to support or a moving average these include: EPAM, STZ, NOAH and AFSI. A potential candidate to the downside is CRUS.
As a point of interest look at the daily chart on CYBR. The stock look like it has potential to the upside but buying volume has not kicked in. This is a very similar pattern to many stocks I place in the tossup category. If a significant amount of either selling or buying volume kicks in, price will either break support at the moving averages or bust the resistance at 55.
Off the Wall: No Off The Wall this weekend.
Share Your Success: Many of you have sent me notes regarding the success you are having with the Active Trend Trading System. Please send your stories to me at email@example.com or leave a post on the website. Thanks.