Art & Science of Active Trend Trading Free Update 10-3

Good Day Traders,

Overview & Highlights:  I fly back to Hawaii on Tuesday this week and will be back to a normal schedule by the end of the week.  An Active Trend Trading member asked if I could do a webinar during market hours with live trading and how I do my orders.  If there is enough interest I would consider doing a live webinar called “The Final Hour” for Strategy III set ups and trades during the last trading hour on Fridays.  If this something that would interest you please let me know at dww@activetrendtrading.com

Webinars:  At Active Trend Trading we offer two webinars per week to provide training plus trade and market updates.  See the schedule below for the next webinars.

How to Make Money Trading Stocks on Friday, Oct 7th  
Register now for the next live webinar at the link below:
 Register Here:  https://attendee.gotowebinar.com/register/1406282346712848642
11:00 a.m. PDT

Next Training Webinar:  Oct 5th    
For Premium Members our Wednesday evening training is developing some fantastic traders!
Topic:  Building a Strategic Plan—Pulling it all Together

 


 

General Market Observation:  The 3 Tracking Indexes finished off September with the typical end of quarter flurry.  Both the NDX and RUT finished up for the month, but the SPX could not make up the downside hit it took at the beginning of September.  The question at this point is what lies ahead?

It is almost a given that the Fed will not touch rates until after the November election.  The November Fed meeting is shaping up as a non-event.  Two more presidential debates remain but at this point there are probably very few undecided voters except those buried in Chicago.  Other outside influence that could come in to move the market are overseas events.  If Duetsche Bank issues continue to grow will this have an unsettling impact or it could result in a pop for the US market as more European Bank money seeks safety in the US markets?  Will the German government step in to bail out the bank?  Will the PIIGS come to the trough over the next few weeks?  Greece is making noise wanting another bailout.  It’s not so much that any of these events by themselves would move the market but will the weight of all of them act as a catalyst.  What about Asia?

I can see a scenario working out where the markets continue working between established support and resistance until after the election.  After the election regardless of who wins, the Fed would no longer be constrained and could raise rates in December.  Given the current soft economy this would be bad for the market and a reaction similar to last December and January would be likely.  What happens if the Fed raised by a half a percentage point rather than a quarter?  I guess it would be a litmus test of how well the economy both within the US and globally is actually doing.  Glad I already refinanced my home at low rates.

Our objective is to read the charts and then trade appropriately.  Based on the charts, the SPX is still the weakest of the Tracking Indexes.  The chart below shows price action working within a range from the 2120 and 2179 levels.  This equates to a range over 2.5% so planning trades at support and resistance could provide some quick trades.  Unfortunately, a longer term trend in either direction has not fully been established.  Churning with in the exiting range appears likely for the immediate future.

Both the NDX and RUT may provide more potential movement to the upside.  The NDX did breakout to new highs so the upside appears to provide the least resistance.  Upside trades from pullbacks to support should be considered until the buying the dip stops working.  The RUT is less predictable because after pushing to new highs for the year it quickly retreated and has not made a serious attempt to move back to the new high levels.

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SPX:   Downside Market Short the SPY, SPY Puts or SPXU.
Preferred Long ETF’s:  SPY, UPRO and SPXL

NDX:   Downside Market Short the QQQ, QQQ Puts or SQQQ.
Preferred Long ETF’s: QQQ and TQQQ

RUT:   Downside Market Short the IWM, IWM Puts or TZA.
Preferred Long ETF’s:  IWM and TNA

The How to Make Money Trading Stock ShowFree Webinar every Friday at 11:00 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.

How to Make Money Trading Stocks on Friday, Oct 7th  
Register now for the next live webinar at the link below:
 Register Here:  https://attendee.gotowebinar.com/register/1406282346712848642
11:00 a.m. PDT

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/c/MarketTechTalk


Index Returns YTD 2016

index-9-30

ATTS Returns for 2016 through Sept 30, 2016

atts-ytd-9-30

Percent invested initial $100K account:  Strategies I & II invested at 3.5%; Strategy III invested at 15%.

atts-ytd-9-30a

 

Current Strategy Performance YTD (Closed Trades)
Strategy I:  Up $616.80 or +0.88%
Strategy II:  Up $3187.00 or +3.18%
Strategy III:  Up $25,262.80
Cumulative YTD:  29.26%

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.  The next update first week in October.


Outs & Ins:   CVG joins the ranks of the IBD 50 this week.  Price action is up against resistance as a consolidation pattern forms.  Of the other stocks that have come back on the list this weekend, PZZA is furthest in its pullback to support.  PZZA has run almost 100% from the low in January.

Many stocks on the IBD 50 are showing overbought weekly charts and oversold daily charts.  This divergence is a reason for caution because the stronger oversold conditions on the weekly charts typically eventually lead to a solid pullback.  With the oversold condition of the daily charts there can be bounces during the pullback that are tradable, but require lower expectations for potential profits.  Additionally, entering prior to solid signals on each timeframe can elongate the time required for a solid move.

Stocks that are in the process of a pullback consolidation include: SIMO, ACIA, BGS, PLNT and CHFC.

in-out-9-30

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 dww@activetrendtrading.com or leave a post on the website.   Thanks.

 

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