ART & SCIENCE of Active Trend Trading–May 6, 2014 Free Edition

Good Day Traders,

How well have you been trading this year so far?  If one knows and is practicing the Active Trend Trading System with the right growth stocks and Index ETF’s then it would not be surprising if you are up at least 10-15%+ for the year.  If this doesn’t reflect your trading for the year, don’t fret–learning to trade takes time and refinement so be patient with your journey.

Moving forward the Art & Science of Active Trend Trading will continue providing this Free weekly edition and add a bi-weekly subscription called “Art & Science of Active Trend Trading—Traders Report” this month.  The Traders Report edition will provide more in depth observations of stocks from the Running List and my “Go-To” list.  Additionally daily updates on stocks and ETF’s that are setting up at potential entry action points and status of current trades will be provided.  Later this week we will be posting our results so far this year at http://activetrendtrading.com so come by and check it out.

A reminder, every Friday at 1:30 p.m. Pacific, the Active Trend Traders is one of the hosts for a free “Market Stock Talk” Webinar.  I want to invite you to attend register here:  https://attendee.gotowebinar.com/register/3809097863963353858

Please keep those great personal stories flowing, it is awesome to share in each other’s successes!

 

General Market Observation:   The market continues to meander along over the past few weeks and remains in correction.  Both the DOW and S&P continue holding up better than the growth and small cap indexes the Nasdaq and Russell.  But each suffered a bit of a reversal today (4/6/14).  With all the current uncertainty around the globe from slowing growth in China to unrest in the Ukraine there seems to be little to excite buyers into stimulating higher momentum to the upside.  So we sit and wait for some direction.  This doesn’t mean that there are not trades; it’s just that expectations must be adjusted towards shorter term trades and lower profit targets.

On the indexes and on many of the leading stocks be aware of where the price action is in regard to the significant moving averages.  The Nasdaq & Russell are currently living below the 50 and 100 day SMA’s  and bouncing from support levels for a few days and then finding resistance and bouncing back down. Both of these indexes are in the midst of a lackluster rally attempt after making a higher swing low last week.  Nasdaq and Russell closed below their 100 & 200 day SMA respectively today and are rapidly approaching a major level of support.  At this point the key word continues to be patience and quick action if one does choose to trade this market.  Cash is a great position while things sort themselves out.

See the charts below.

.SPX 5-6

RUT 5-6

 

 

Outs & Ins:  Earnings is one of the big themes for the stocks on the Running List.  During this week over 25% of the stocks on the list are reporting so like the markets while we’re looking for trades,  the set-up Action Points must be observable before we make any comments on the stocks.

The only stock making a debut is FF which reports earnings on 5/8 AMC and is a low volume stock.  Of the reminder of the stocks 42% are currently below their 50 day moving averages and appear to be trying to form bases.  Several big names are reporting over the next couple days.  TSLA’s report after hours has the greatest potential to stimulate some momentum either up or down.  GMCR reports on 5/8 AMC and PCLN BMO.  As of this evening there are now great set ups to report.  One to watch to the downside is BWLD to the upside OTEX.

We’re currently long GLOG which will split off a limited partnership tomorrow with the ticker GLOP which will supposedly pay a 7%+ dividend.  We’ll see if this inflow of cash provides momentum for GLOG to continue to the upside.

Out-In 5-6

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It’s Off the Chart:  This will be a new section for the Art & Science of Active Trend Trading—Traders Report.  It will include stocks and ETF’s that are approaching proper entry Action Points, summary of past trades, status of existing open trades and watch list updates from my exclusive watch list.  Here’s a sample of what to expect.

Update on GLOG:  Capital Growth Trade—A long position in GLOG was entered on 4/29/2014 with price action bouncing off the 20 day SMA, which also converged with the lower trend line in the upward sloping channel.  This trade is intended to be a longer term capital growth trade and will use the ATTS stop loss rules of a violation below the low of the first close below the 8 day EMA (a two day pattern) for protection and profit.  Thus far the trade is up 6.3%.

Today’s price action resulted in a failed breakout attempt and a spinning top doji which warrants close observation if a more significant breakdown follows.  Overall GLOG is holding up better than the market.

Glog

Update on TSLA:  Income Generating Trade & Capital Growth Trade—With TSLA reporting earnings after the market on 5/7 a pre-earning trade was entered last week on 4/28/14 buying shares at $193.10 bouncing off a support zone and the 100 day SMA.  The plan was to sell half the position moving up to the resistance at the upper line of the down trending channel and then hold the remaining shares through earning with the protection of a covered call using weekly OTM options.

On 5/5/14 price action moved to the upper channel line and triggered a conditional order with a $1.00 trailing stop that executed at $215.99 representing an 11.85% or $2289.00 of income generation for the week.  The remaining part of the trade will reveal itself after market close on 5/7.

TSLA 5-6

These two examples are reflective of the type of trades that we look for at the Active Trend Traders from our list of fundamentally strong stock.  When we find quality set ups approaching proper buy Action Points an email will be sent to subscribers so they can do their own analysis and paper trade a similar trade.  Because we look for quality set-ups patience is key and often several days may go by before a mature setup is observed and notification email issued.  As with anything in the market, there is no guarantee that trades will be profitable, and that’s why the stop loss criteria is equally crucial.

 

Comments and opinions written below this line of text may be provocative and only obliquely related to trading.  Some may find these “Off the Wall” comments challenging to their outlook on life.  I will not post any comments made on subject matter below this line to the group, so if you disagree blast away. 

 OFF THE WALL Main Wall

Off the Wall:  I find critical people very challenging and kind of group them in with whiners and complainers as folks I prefer not being around.  Now I’m not talking about folks who are really down on their luck or having some temporary physical or financial challenges, I’m talking about people who habitually have these personality characteristics.  What really gets me going is folks whose lives reflect amazing blessings and favor, but they are still complaining, whining negative people.  It’s like someone forgot to give them the chocolate sprinkles on top of the ice cream or something.  I have found that folks like this tend to be a bit controlling.  They want to control everything and everyone in their lives and when everything and everyone fails to meet expectations then out comes the negative sour attitude, complaints and whining!  In life we all either know someone like this or we are someone like this.

Did you know a negative, whinny, complaining attitude and outlook can negatively impact your ability to trade well?  This kind of attitude seems to repel success, because success would be a blessing to be celebrated and for some chronic complainers celebrating anything in life is not part of their script!  If you are a person like this there is hope but it will take major personal work to grow a new attitude to become a better traders.  Self-sabotaging behavior can be corrected but it takes a lot of work.

If you are not a negative, complaining, whining victim, but have one in your life did you know that their attitude can spill over into your trading?  Unfortunately for us more positive types, our negative friends and family are sticky like a spider web that is designed to entangle us in the web of their discontent.  One can try to combat the negative presence but that isn’t enough…because our habitually negative friends and families know lots of different tricks to get us to sit next to them on their pity pot and agree with them about how bad things are.  We must be aware of their schemes to pull us down them and then take action to lessen or totally remove the negativity.  If we fail to recognize and take positive action against these schemes our trading will also be negatively impacted.  This is unfortunate, because isn’t trading tough enough by itself, we don’t need more variables to affect our focus or our outcomes!

 

Share Your Trades:  Many of you have sent me notes regarding the success you are having with the Active Trend Trading System.  Please send you stories to me at dww@activetrendtrading.com so I can share them with our fellow traders.  Plus, if you are considering a trade that appears to be at a proper Action Point, send that alert also!  Thanks!

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