Market Updates Archive 2016

June 30, 2016

Good Day Traders,

Market Update: Today puts a wrap on the trading month of June. Since last Thursday the SPX has plunged over 122 points and recovered over 86% of the loss. I asked the question a few days ago regarding how this latest sell off would react. Ove the last three days it has reacted more like a flash crash. Did stocks recover because of true market strength or because when viewed globally the US Market offers the least risk? I lean towards the latter. With extremely low interest rates and global weakness, the US market appears to be the preferred destination for global investors. Add to this the typical bullish bias of the end of a quarter and the table was set for a rebound. Is the violence of this latest move an indication of market strength? No, but it is what it is and not advantageous for orderly setups and entries. The SPX chart below depicts the rapid fall and rise over the past five days. But what now?

As it turns out the best charts to find patterns to trade are the intraday charts either the 30 minute or 60 minute charts. This makes trades challenging for those unable to view intraday charts during trading hours so if you are unable to view the intraday charts a trader has a couple of choices. The first valid choice is to just stand aside until order returns, the second is to estimate price levels where reversals should take place and use conditional orders. The second option can lead to whipsaw so if that is your choice use partial position sizes rather than full positions. We did this with the Early Warning System this week. We had a Standby Alert on Monday, but if one didn’t take a partial position on Monday the next three days took off with no secondary entry trigger. Overall the move over the last three days is suspect. On the daily chart below the momentum oscillators are dramatically lagging the huge price move. This is not the sign of a sound rebound. What do we do now? Plan for a downside reversal because price has pushed up into resistance so quickly. Draw the Fib Retracement from the high on 6/23 to the low on 6/27. Use the 78.6% retracement as a trigger line for potential retreat and entry into a downside trade. A stop above today’s high or moving back above the 78.6% retracement would be appropriate. Another approach is to use the hourly intraday chart and wait for a reversal signal and retest. As we saw last year and early this year, when the Indexes get into the wild swing mode the 8/20 day EMA moving averages are not nearly as useful for levels of support or resistance. It appears price action is in that mode.

Both the RUT and NDX are not demonstrating the same level of power on this bounce as the SPX. If price action weakens these two Indexes could lead to the downside.

SPX 6-30

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


Managing Existing Trades: Positions open for 3 strategies.

Strategy I Portfolio Building:
Bought 200 shares of TZA at 41.60
T1 = 5% -10% to close 100 Shares
T2 = Time Stop of July 1st
Stop Loss = Will hold and sell weekly covered calls on remaining position to reduce cost basis while waiting for the Market downturn. Will hold until July 1st.

Hit T1 sold 100 shares at 43.79 for a gain of 5.26% or Profit of $219.00
Approaching Time Stop sold 100 shares at 42.60 for a gain of 2.4% or Profit of $100.00
Total Profit = $319

Strategy II Income Generation:
Weekly Profit
GLD closed ¼ of 12 contract spread: Profit of $303
TZA closed 24Jun 38.5C for profit of $75

Trade 1: GLD 19Aug 122/127C Debit Spread bought for $1.49 as a seasonal trade on Gold
Sold ¼ of 12 positions at $250 for a profit of $303. Sell next 1.4 at $3.00 and the last ½ at between $4.5 and $4.90.
GLD moved to far too quickly so first target of $3.00 had to be adjusted down because underlying price objective was achieved.

Trade 2: TZA Trade: Sold 1 contracts of TZA 1Jul 40C at 1.18
Stopped out at 2.73 for a Loss of $155

Thus far $181 has been cleared to reduce cost basis of the TZA position.
Net Gain: $26

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words, if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally, please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Additionally, it is crucial when selling premium against the Long LEAPS position that the premium collected cover the weekly cost of holding the LEAPS plus an additional amount to over this amount as a gain. This is one of the reason I sell premium of weekly options that are close to be “At The Money”. I base my selling on the expected move during the next week. If one is not bringing enough weekly premium this trade will not work out as well and may wind up being a losing trade.

Strategy III Weekly Results Week ending 7/1:
SPY: Loss -$1085 (Wrong kind of double dip this week)
TSLA: Profit +$775

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 22.29%; Premium Collected since opening trade on 1/4/16 = $5350

Sold 3 contracts of SPY 1Jul 203P at 2.68—Potential Profit $804
Hit Stop at $4.23 for a loss of $465

Sold 4 contracts of SPY 1Jul 206C at 0.98—Potential Profit $392
Hit Stop at $2.53 for a loss of $620

Trade 2: Long TSLA Jan17 250C & Long Jan17 220 + New Positions Jan17 210C and 220P: Current Position Total Invested $14,900
Currently Up 61.67%: Premium Collected since opening trade on 9/28/15 = $12,935.50 + New Positions at $1,594.50 = Total Collected $14,530

Sold 2 contracts of TSLA 1Jul 192.5P at 5.13—Potential Profit $1026
Closed 1 contract at $1.50 and the other at $1.00 for a total profit of $775

Sold 2 contracts of TSLA 1Jul 207.5C at 2.31—Potential Profit $462

Pre-Earnings Trade: No weekly candidates. Pre-earnings trades can be a great supplement to the portfolio building portion of Strategy I. Depending on the stock and technical analysis they tend to be predictable and repeatable. For busy traders focusing on pre-earning opportunities can free one up from the necessity of constantly chasing stocks during other periods of the year. The process repeats four times a year and capturing a 5%-15% return four times a year can compound very nicely!

Potential Set Ups for this week: Most stocks have demonstrated a similar quick bolt like the Indexes. No real pattern building. I’m looking for some selling tomorrow now that the end of quarter window dressing has taken place today. Is it an opportunity to the downside? Perhaps, wait for solid retreats from established levels of resistance. The most immediate challenge is to not chase some of this wild action and choose our action points. We do not want to get on the wrong side by chasing.

Upside: If Indexes weaken look for the Inverse Index ETFs to come back into play. Stocks: CME, GLD**, ELLI**, COR & LGIH

Downside: Some very strong weak candidates for this week if the Indexes continue to weaken. These include: NFLX, TSLA (prime candidate), AVGO, ANET, WYNN, CTXS and BIDU

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, GLD, TSLA (270 resistance/140 support), AMZN, NFLX, BIDU, CME, WYNN, PAYC, ELLI, BABA & NTES

Stocks identified by ** that are close to a potential entry point.

Early Warning Alerts for Leveraged Index ETFs: Standby alert triggered 6/27. Expected move on leveraged Index ETFs between 5-8%. Buy trigger has not fired yet. Some members may have entered a partial position in either TNA or UPRO today. To track for the more aggressive traders, I will track 1/3 positions or 60 shares of TNA and 55 shares of UPRO entered at 54 and 57.35 respectively.

An upside trade for TZA triggered on 5/17 and a courtesy alert was sent to all EWA members. I plan on holding this position until July 1st or until price hits $55. Closed 200 shares on 6/27 at 42.65 for a gain of 2.52% or $210


June 28, 2016

Good Day Traders,

Market Update: While today qualifies as a reversal day on each of the three Tracking Indexes there was one missing ingredient. The missing ingredient was a solid reversal candlestick pattern for both the SPX and NDX. We do have a long alert on the Indexes but I would like to see a reversal candle to provide a bit more credence to an upswing even if it’s just a “dead cat” bounce. The Russell did finish with a bullish harami pattern so this may be the most promising of the Indexes for a solid bounce which is more orderly and less volatile.

Today’s action does provide a reference point that can be used for upside trades on the SPX which is the 200 day moving average. A drop to this level with a rebound can be used to trigger an upside trade with an target of the 100 day moving average. Longer term, the Momentum on the weekly SPX chart dropped below the zero line and the TSI is perched to do the same on the return of weakness. The upside target zone between 2040 and 2060 is valid on this bounce.

Another positive is the new Green Arrow indicating that today’s price action closed above the High of the Low Day. In the past when the Green Arrow appeared there was at least a short term trend change. Retest into the body of the candle of the Green Arrow day served as an entry opportunity.

NDX gapped above yesterday’s candle and finished close to the high of the day. Similar comments to the SPX regarding a Green Arrow day. Upside target zone for the NDX is between 4324 and 4358. Last and least was the move by the RUT. It provided a bullish harami or bullish inside day. Testing anywhere within today and yesterday’s candles could provide an upside entry.

If tomorrow’s price action simply results in just another big sell-off the analysis of today voided and show that the Indexes may be entering a more unpredictable phase with strong downside overtones.

SPX 6-28

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


Managing Existing Trades: Positions open for 3 strategies.

Strategy I Portfolio Building:
Bought 200 shares of TZA at 41.60
T1 = 5% -10% to close 100 Shares
T2 = Time Stop of July 1st
Stop Loss = Will hold and sell weekly covered calls on remaining position to reduce cost basis while waiting for the Market downturn. Will hold until July 1st.

Hit T1 sold 100 shares at 43.79 for a gain of 5.26% or Profit of $219.00
Approaching Time Stop sold 100 shares at 42.60 for a gain of 2.4% or Profit of $100.00
Total Profit = $319

Strategy II Income Generation:
Weekly Profit
GLD closed ¼ of 12 contract spread: Profit of $303
TZA closed 24Jun 38.5C for profit of $75

Trade 1: GLD 19Aug 122/127C Debit Spread bought for $1.49 as a seasonal trade on Gold
Sold ¼ of 12 positions at $250 for a profit of $303. Sell next 1.4 at $3.00 and the last ½ at between $4.5 and $4.90.
GLD moved to far too quickly so first target of $3.00 had to be adjusted down because underlying price objective was achieved.

Trade 2: TZA Trade: Sold 1 contracts of TZA 1Jul 40C at 1.18
Stopped out at 2.73 for a Loss of $155

Thus far $181 has been cleared to reduce cost basis of the TZA position.
Net Gain: $26

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words, if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally, please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Additionally, it is crucial when selling premium against the Long LEAPS position that the premium collected cover the weekly cost of holding the LEAPS plus an additional amount to over this amount as a gain. This is one of the reason I sell premium of weekly options that are close to be “At The Money”. I base my selling on the expected move during the next week. If one is not bringing enough weekly premium this trade will not work out as well and may wind up being a losing trade.

Strategy III Weekly Results Week ending 7/1:
SPY: Loss -$465
TSLA: Profit +$775

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 22.29%; Premium Collected since opening trade on 1/4/16 = $5350

Sold 3 contracts of SPY 1Jul 203P at 2.68—Potential Profit $804
Hit Stop at $4.23 for a loss of $465
Will wait for second set up this week to offset this loss for SPY

Trade 2: Long TSLA Jan17 250C & Long Jan17 220 + New Positions Jan17 210C and 220P: Current Position Total Invested $14,900
Currently Up 61.67%: Premium Collected since opening trade on 9/28/15 = $12,935.50 + New Positions at $1,594.50 = Total Collected $14,530

Sold 2 contracts of TSLA 1Jul 192.5P at 5.13—Potential Profit $1026
Closed 1 contract at $1.50 and the other at $1.00 for a total profit of $775

Pre-Earnings Trade: No weekly candidates. Pre-earnings trades can be a great supplement to the portfolio building portion of Strategy I. Depending on the stock and technical analysis they tend to be predictable and repeatable. For busy traders focusing on pre-earning opportunities can free one up from the necessity of constantly chasing stocks during other periods of the year. The process repeats four times a year and capturing a 5%-15% return four times a year can compound very nicely!

Potential Set Ups for this week: Most stocks made a stand at yesterday’s low and rebounded today, but in a pattern much like the Indexes. Solid entry patterns have yet to appear and may show themselves between Wednesday and Friday. At the same time, we must remember that the many of the stocks may only be forming bear flags and setting up for the next leg down sometime in July. If you are watching a stock that is currently living below it’s moving averages the trend on that stock is down so reactionary move ups are shorting opportunities or countertrend upside trading opportunities. Remember to go with the Momentum, keep tight stops and be happy with lower profit expectations.

Upside: Inverse Index ETFs, SPXU, SQQQ or TZA. Stocks: CME, GLD, ELLI**, COR & LGIH

Downside: Some very strong weak candidates for this week if the Indexes continue to weaken. These include: NFLX, TSLA (prime candidate), AVGO, ANET, WYNN, CTXS and BIDU

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, GLD, TSLA (270 resistance/140 support), AMZN, NFLX, BIDU, CME, WYNN, PAYC, ELLI & NTES

Stocks identified by ** that are close to a potential entry point.

Early Warning Alerts for Leveraged Index ETFs: Standby alert triggered 6/27. Expected move on leveraged Index ETFs between 5-8%. Buy trigger has not fired yet. Some members may have entered a partial position in either TNA or UPRO today. To track for the more aggressive traders, I will track 1/3 positions or 60 shares of TNA and 55 shares of UPRO entered at 54 and 57.35 respectively.

An upside trade for TZA triggered on 5/17 and a courtesy alert was sent to all EWA members. I plan on holding this position until July 1st or until price hits $55. Closed 200 shares on 6/27 at 42.65 for a gain of 2.52% or $210


 

June 27, 2016

Good Day Traders,

Market Update: Partly counteracting the effects of BREXIT breakage is end of month and end of quarter positioning. Plus, the hard sell-off that continued today is looking for a level of support strong enough to bounce from. On the SPX price action hit an important retracement level at the 161.8% which is also just above a long time support zone from December 2015. These levels are reflected on the chart below. If this is the bounce level what can we expect? Will price retest up and the 2100 level? This is possible but not probable given the weakness of the current pattern. What we’re looking for is a reaction move between 1.3 – 3% which would take price back to the 2026 – 2050 zone. This move could work out over during this week and setup for more downside going into July which has been a weaker month over the past few years. If price action follows a similar pattern as 7 out of the past 10 years July-August may a weak part of the year.

The question for each trader is “do you trade counter trend?” If one chooses to follow this course, then I would expect no more than a pull back into the identified levels of resistance. If this move is orderly over the next 3-4 days, then the 8/20 day moving averages may be at these levels to also provide levels of resistance.

Both NDX and RUT accelerated to the downside and bounced up from Fib Retracement levels. NDX price action is the weakest of the Tracking Indexes. The Russell’s price action has now dropped all of the moving averages and has provided a 100 retracement of the May rally. Each look postured to bounce, but to what level of resistance. If trading the leveraged Index ETFs, the Russell’s ETF’s may provide larger moves. Remember when the RUT’s daily range begins to grow it can move up or down 3-5% in a single day. Today’s range was over 3%!

SPX 6-27

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


Managing Existing Trades: Positions open for 3 strategies.

Strategy I Portfolio Building:

Bought 200 shares of TZA at 41.60
T1 = 5% -10% to close 100 Shares
T2 = Time Stop of July 1st
Stop Loss = Will hold and sell weekly covered calls on remaining position to reduce cost basis while waiting for the Market downturn. Will hold until July 1st.

Hit T1 sold 100 shares at 43.79 for a gain of 5.26% or Profit of $219.00
Approaching Time Stop sold 100 shares at 42.60 for a gain of 2.4% or Profit of $100.00
Total Profit = $319

Strategy II Income Generation:

Weekly Profit
GLD closed ¼ of 12 contract spread: Profit of $303
TZA closed 24Jun 38.5C for profit of $75

Trade 1: GLD 19Aug 122/127C Debit Spread bought for $1.49 as a seasonal trade on Gold
Sold ¼ of 12 positions at $250 for a profit of $303. Sell next 1.4 at $3.00 and the last ½ at between $4.5 and $4.90.
GLD moved to far too quickly so first target of $3.00 had to be adjusted down because underlying price objective was achieved.

Trade 2: TZA Trade: Sold 1 contracts of TZA 1Jul 40C at 1.18
Stopped out at 2.73 for a Loss of $155

Thus far $181 has been cleared to reduce cost basis of the TZA position.
Net Gain: $26

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words, if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally, please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Additionally, it is crucial when selling premium against the Long LEAPS position that the premium collected cover the weekly cost of holding the LEAPS plus an additional amount to over this amount as a gain. This is one of the reason I sell premium of weekly options that are close to be “At The Money”. I base my selling on the expected move during the next week. If one is not bringing enough weekly premium this trade will not work out as well and may wind up being a losing trade.

Strategy III Weekly Results Week ending 6/24:
SPY: Profit +$460
TSLA: Profit +$52

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 22.29%; Premium Collected since opening trade on 1/4/16 = $5350

Sold 3 contracts of SPY 1Jul 203P at 2.68—Potential Profit $804
Hit Stop at $4.23 for a loss of $465
Will wait for second set up this week to offset this loss for SPY


Trade 2: Long TSLA Jan17 250C & Long Jan17 220 + New Positions Jan17 210C and 220P: Current Position Total Invested $14,900
Currently Up 56.46%: Premium Collected since opening trade on 9/28/15 = $12,347 + New Positions at $1,356 = Total Collected $13,755

Sold 2 contracts of TSLA 1Jul 192.5P at 5.13—Potential Profit $1026

Pre-Earnings Trade: No weekly candidates. Pre-earnings trades can be a great supplement to the portfolio building portion of Strategy I. Depending on the stock and technical analysis they tend to be predictable and repeatable. For busy traders focusing on pre-earning opportunities can free one up from the necessity of constantly chasing stocks during other periods of the year. The process repeats four times a year and capturing a 5%-15% return four times a year can compound very nicely!

Potential Set Ups for this week: Many stocks will be searching for support this week. A bounce from Friday’s selloff is expected but from what level? Not much to add from the Weekend Trader’s Report. Waiting to see what kind of a bounce happens. Price action may rise into Friday and set up some good downside opportunities towards Thursday and Friday! Both CME and GLD act well in a down market typically so I’ll waiting for setups in each.

Upside: Inverse Index ETFs, SPXU, SQQQ or TZA. Stocks: CME, GLD, COR & LGIH

Downside: Some very strong weak candidates for this week if the Indexes continue to weaken. These include: NFLX, TSLA (prime candidate), AMZN, AVGO, ANET, WYNN, CTXS and BIDU

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, GLD, TSLA (270 resistance/140 support), NFLX, BIDU, CME, WYNN, PAYC, ELLI & NTES

Stocks identified by ** that are close to a potential entry point.

Early Warning Alerts for Leveraged Index ETFs: Standby alert triggered 6/27. Expected move on leveraged Index ETFs between 5-8%. Buy trigger has not fired yet. Some members may have entered a partial position in either TNA or UPRO today. To track for the more aggressive traders, I will track 1/3 positions or 60 shares of TNA and 55 shares of UPRO entered at 54 and 57.35 respectively.

An upside trade for TZA triggered on 5/17 and a courtesy alert was sent to all EWA members. I plan on holding this position until July 1st or until price hits $55. Closed 200 shares on 6/27 at 42.65 for a gain of 2.52% or $210


June 23, 2016

Good Day Traders,

Market Update: Tonight’s update will be very short. It appears that “BREXIT” the non-event according to today’s rally may actually be an event that will rattle global markets at least momentarily. The Dow futures have been off as much as 800 points has recovered slightly to down about 650 points. Given that the Dow surged over 200 points today the Dow could open tomorrow down about 400 points from Wednesday’s close. Tomorrow will be a great day to just stand aside and let the market do its thing. No need for heroics or catching falling knifes. For many members this may be the first time you get to experience a big down day, so watching from the sideline can be very educational.

I currently have 4 open positions. The SPY, GLD & TZA positions will benefit from a market drop. I have the covered call on TZA that will limit upside on this position but I’ll attempt to close it out breakeven first thing tomorrow morning. The short SPY calls can be bought back at a nickel or less at the open I’ll place an order to buy back at 2 cents. The TSLA trade is the toss-up. TSLA finished well today and looked like it was going to move towards $200 tomorrow where both the Put legs could be closed for a profit. TSLA tends to go its own way regardless of market conditions so it may be a good surprise tomorrow.

The SPX trade I opened today as a speculation has a max loss of $70 and cash settles at the close tomorrow. I do not need to buy back this position because with a cash settled option there is no assignment.

I’ve been holding TZA in the Early Warning Account to close on July 1st. If this is a catalyst that will send the markets reeling this trade could turn profitable very quickly.

I’m writing this report about 10:40 pm PDT which means the European Market opens in about 40 minutes. The Asian market is already selling off big so this contagion may go global over the next 12 hours or so.

Other than just standing aside, I’m left with two questions. Will this initial reaction to the BREXIT be just a flash crash? Or will this be the catalyst we’ve been waiting for a bigger dive?


June 21, 2016

Good Day Traders,

Market Update: Before getting into today’s update I want to cover TSLA quickly. After hours’ news comes out that TSLA will buy Solar City for shares of TSLA. The initial reaction was a significant hit of TSLA share dropping from close to $220 down below $191. One thing for certain is that the current short calls held for Strategy III will go to almost zero in the morning. I will place an order to buy back both covered calls around $0.03. The reason I buy back rather than let the options expire worthless is that as soon as I close the short position it frees up the Long Call LEAPS on TSLA to trade with again. This move will push the return on the first TSLA Strategy III trade to over 80%. Remember I’m waiting for 100% which means the initial $9000 has been covered plus an additional $9000 either collected from weekly premium or movement of the stock. Overall tomorrow’s projected drop will take prices down to the 61.8% retracement of the move from 2/8 through 4/4, so it could be considered a normal pullback. There is also strong support at the $180 level. But is this a buying opportunity for TSLA? We shall see! As I’ve said, “TSLA is a wild ride!”

Not a lot of action in the Tracking Indexes today. This may be a theme through Thursday’s until the Brits vote on Brexit. The results of the vote will be out around 6 pm East Coast time Thursday. This may lead to a lot of volatility in the futures markets from Thursday night through Friday Pre-Market. Right now it appears like the decision is a toss-up.

Tonight I’m highlighting the Russell on the included chart. The RUT sold off with the other Indexes last week in reaction to the Fed announcement. However, the RUT held above its shorter term 8-20 day moving averages which can be viewed as showing greater strength than the other Indexes. There is strong support at the 50 day moving average which is at the 1134 level. Strong resistance resides just above the 23.6% Fib Retracement level which is where sellers showed up yesterday. Even on the weekly chart the RUT is showing greater strength. At this point I’m would look at either the SPY or NDX for potential downside trades because of the weakness they have been showing. A characteristic on each of the indexes to be aware of is that none of them is showing a uniform, sound, orderly pullback. Price have been very news driven hence the gaps and wide daily swings. My favorite Index to trade to the downside on a pullback into the 8/20 day EMA’s currently is NDX.

RUT 6-21

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


Managing Existing Trades: Positions open for 3 strategies.

Strategy I Portfolio Building:

Position 2: Long 100 shares of TZA
Bought 200 shares of TZA at 41.60
T1 = 5% -10% to close 100 Shares
T2 = Hold until July 1st

Stop Loss = Will hold and sell weekly covered calls on remaining position to reduce cost basis while waiting for the Market downturn. Will hold until July 1st.
Hit T1 sold 100 shares at 43.79 for a gain of 5.26% or Profit of $219.00

Strategy II Income Generation:
Assessing a seasonal trade on Gold using GLD as the vehicle. Typically, gold rallies between June and August most years. A trade may set up in quick order that take advantage of this pattern.

TZA Trade: Sold 1 contracts of TZA 24Jun 38.5C at 1.24

Thus far $106 has been cleared to reduce cost basis of the TZA position.

I will monitor volatility for a potential trade when VIX turns around. Right now there is very little fear in the market place!

Strategy II stocks of interest for this week: TSLA & Index ETF’s. Will reload with new candidates after this weekend’s review.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words, if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally, please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Additionally, it is crucial when selling premium against the Long LEAPS position that the premium collected cover the weekly cost of holding the LEAPS plus an additional amount to over this amount as a gain. This is one of the reason I sell premium of weekly options that are close to be “At The Money”. I base my selling on the expected move during the next week. If one is not bringing enough weekly premium this trade will not work out as well and may wind up being a losing trade.

Strategy III Weekly Results Week ending 6/17:
SPY: Profit +$496
TSLA: Profit +$987

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 19.84%; Premium Collected since opening trade on 1/4/16 = $4,890

Sold 4 contracts of SPY 24Jun 210C at 1.18—Potential Profit $472
-Need to open an additional position to bring in approximately $200 this week to meet income goal

Trade 2: Long TSLA Jan17 250C & Long Jan17 220 + New Positions Jan17 210C and 220P: Current Position Total Invested $14,900
Currently Up 52.7%: Premium Collected since opening trade on 9/28/15 = $12,347 + New Positions at $1,356 = Total Collected $13,703

Sold 1 contracts of TSLA 24Jun 222.5C at 3.00—Potential Profit $300
Sold 1 contracts of TSLA 24Jun 225C at 2.16—Potential Profit $216
-Need to open additional positions to bring in approximately $300 this week to meet income goal. Good thing I didn’t open the short Put side today!


Pre-Earnings Trade: No weekly candidates. Pre-earnings trades can be a great supplement to the portfolio building portion of Strategy I. Depending on the stock and technical analysis they tend to be predictable and repeatable. For busy traders focusing on pre-earning opportunities can free one up from the necessity of constantly chasing stocks during other periods of the year. The process repeats four times a year and capturing a 5%-15% return four times a year can compound very nicely!

Potential Set Ups for this week: This week may be as volatile as last week. There are several promising candidates to watch in both directions. Typically, there will be a little bounce after Triple Witching Friday as Institution readjust the balancing required the previous Friday. If the markets continue to just churn between support and resistance be ready to take smaller profits and keep stops tight.

Over the next few weeks I’m going to focus on TSLA trades to demonstrate the mechanics of the Active Trend Trading System. Why TSLA? Price action, repeating patterns and great options. My wife actually said, “why don’t you just trade TSLA so she can buy a new Lexus!” Maybe I’ll make that goal of trading TSLA through the rest of the year. I believe by demonstrating on one stock that has consistently made me money will provide lessons that members can then translate to other entities. This will enforce the concept of trading the patterns. Please provide your thoughts or comments.

The TSLA update was covered at the top of the page. Tomorrow’s plummet will primarily be news driven. I’ll be watching the follow on reaction to plan additional trades on TSLA. Will tomorrow’s gap down provide a buying or selling opportunity. We shall see! I may look to sell weekly Put premium at the $190 level depending on pre-market data.

Still valid: One observation over the past few weeks is that many stocks are showing ‘V’ bottoms. This type of bottom tends to be weak and can provide some violent correction once the momentum starts running out. Because of this we need to adjust expectations for returns on individual trades to smaller profit targets and tight stops. 5% – 15% are great objectives for initial targets and if hit setting breakeven stop losses is prudent.

Upside: Inverse Index ETFs, SPXU, SQQQ or TZA. Stocks: GLD, CME& WYNN.

Downside: Some very strong weak candidates for this week if the Indexes continue to weaken. These include: NFLX, TSLA (prime candidate), NTES, EW, CTXS and BIDU

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (270 resistance/140 support), NFLX, BIDU, CME, WYNN, PAYC, ELLI & NTES

Stocks identified by ** that are close to a potential entry point.

Early Warning Alerts for Leveraged Index ETFs: Waiting for New Entry trigger and Alert reset.

An upside trade for TZA triggered on 5/17 and a courtesy alert was sent to all EWA members. I plan on holding this position until July 1st or until price hits $55. During this time rather than a stop loss I will sell weekly covered calls. A major reason of choosing TZA is that it has weekly options which provides the opportunity to collect premium while price oscillate. Going forward Mike will trigger the long EWA alerts and I will trigger the short side triggers as courtesy alerts to members.


June 20, 2016

Market Update: The battle between buyers and sellers basically ended in a draw today. Early price action on the SPX tested at the 2100 level but finished in the bottom third of the day’s range just below the 8/20 EMA cluster. A conflict exists between the daily and weekly chart with the daily charts looking primed for at least a wedge up based on the TSI and Momentum. The weekly chart looks more primed for more downside. I want to see a more controlled wedge up but seldom does the market give us exactly what we’re want. The next 3 days will probably lead to more volatility as the Fed Head reports to Congress and the Brits vote on exiting the EU. Right now it appears that staying in the EU is leading in the poling. If the vote works out this way it may provide a catalyst for at least a bounce. If this happens this bounce may be telling regarding direction moving into the remaining summer months. I hate to admit it but the action of the global central banks may be working to counter a massive meltdown. Whether their action is simply adding weight an even more severe meltdown in the future will be determined.

At this point trading is straight forward wait for support to get long the Index ETF’s and resistance to get long the Inverse Index ETF’s. This will lead to very short term trades so if that doesn’t fit your personal trading profile stay mostly in cash. Times like this in the market make option trading advantageous because risk one can control risk and move in and out with little capital committed. If translating the SPX move to the SPY the range between support and resistance is approximately $4, so plan trades around taking half of this as a profit if trading Delta 70 options or approximately ½ of the move of the leveraged Index ETFs.

Both the NDX and RUT put in similar pattern as the SPX today. However, NDX is weaker and bounced down from the 8/20 day EMAs. It provided the weakest price action of the three Tracking Indexes. RUT on the other hand held up fairly well finishing in the upper half of the daily range. The RUT closed above both the 8 & 20 day EMAs. The remainder of the week should bring additional excitement so buckle up!

SPX 6-20

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


Managing Existing Trades: Positions open for 3 strategies.

Strategy I Portfolio Building:

Position 2: Long 100 shares of TZA
Bought 200 shares of TZA at 41.60
T1 = 5% -10% to close 100 Shares
T2 = Hold until July 1st

Stop Loss = Will hold and sell weekly covered calls on remaining position to reduce cost basis while waiting for the Market downturn. Will hold until July 1st.
Hit T1 sold 100 shares at 43.79 for a gain of 5.26% or Profit of $219.00

Strategy II Income Generation:
TZA Trade: Sold 1 contracts of TZA 24Jun 38.5C at 1.24
Thus far $106 has been cleared to reduce cost basis of the TZA position.

I will monitor volatility for a potential trade when VIX turns around. Right now there is very little fear in the market place!

Strategy II stocks of interest for this week: TSLA & Index ETF’s. Will reload with new candidates after this weekend’s review.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words, if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally, please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Additionally, it is crucial when selling premium against the Long LEAPS position that the premium collected cover the weekly cost of holding the LEAPS plus an additional amount to over this amount as a gain. This is one of the reason I sell premium of weekly options that are close to be “At The Money”. I base my selling on the expected move during the next week. If one is not bringing enough weekly premium this trade will not work out as well and may wind up being a losing trade.

Strategy III Weekly Results Week ending 6/17:
SPY: Profit +$496
TSLA: Profit +$987

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 19.84%; Premium Collected since opening trade on 1/4/16 = $4,890

Sold 4 contracts of SPY 24Jun 210C at 1.18—Potential Profit $472
-Need to open an additional position to bring in approximately $200 this week to meet income goal

Trade 2: Long TSLA Jan17 250C & Long Jan17 220 + New Positions Jan17 210C and 220P: Current Position Total Invested $14,900

Currently Up 52.7%: Premium Collected since opening trade on 9/28/15 = $12,347 + New Positions at $1,356 = Total Collected $13,703

Sold 1 contracts of TSLA 24Jun 222.5C at 3.00—Potential Profit $300
Sold 1 contracts of TSLA 24Jun 225C at 2.16—Potential Profit $216
-Need to open additional positions to bring in approximately $300 this week to meet income goal


Pre-Earnings Trade: No weekly candidates. Pre-earnings trades can be a great supplement to the portfolio building portion of Strategy I. Depending on the stock and technical analysis they tend to be predictable and repeatable. For busy traders focusing on pre-earning opportunities can free one up from the necessity of constantly chasing stocks during other periods of the year. The process repeats four times a year and capturing a 5%-15% return four times a year can compound very nicely!

Potential Set Ups for this week: This week may be as volatile as last week. There are several promising candidates to watch in both directions. Typically, there will be a little bounce after Triple Witching Friday as Institution readjust the balancing required the previous Friday. If the markets continue to just churn between support and resistance be ready to take smaller profits and keep stops tight.

Over the next few weeks I’m going to focus on TSLA trades to demonstrate the mechanics of the Active Trend Trading System. Why TSLA? Price action, repeating patterns and great options. My wife actually said, “why don’t you just trade TSLA so she can buy a new Lexus!” Maybe I’ll make that goal of trading TSLA through the rest of the year. I believe by demonstrating on one stock that has consistently made me money will provide lessons that members can then translate to other entities. This will enforce the concept of trading the patterns. Please provide your thoughts or comments.

Still valid: One observation over the past few weeks is that many stocks are showing ‘V’ bottoms. This type of bottom tends to be weak and can provide some violent correction once the momentum starts running out. Because of this we need to adjust expectations for returns on individual trades to smaller profit targets and tight stops. 5% – 15% are great objectives for initial targets and if hit setting breakeven stop losses is prudent.

Upside: Inverse Index ETFs, SPXU, SQQQ or TZA. Stocks: CME & WYNN (both of these stocks are showing excellent trading patterns.)

Downside: Some very strong weak candidates for this week if the Indexes continue to weaken. These include: NFLX, TSLA (prime candidate), NTES, EW, CTXS and BIDU

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (270 resistance/140 support), NFLX, BIDU, CME, WYNN, PAYC, ELLI & NTES

Stocks identified by ** that are close to a potential entry point.

Early Warning Alerts for Leveraged Index ETFs: Waiting for New Entry trigger and Alert reset.

An upside trade for TZA triggered on 5/17 and a courtesy alert was sent to all EWA members. I plan on holding this position until July 1st or until price hits $55. During this time rather than a stop loss I will sell weekly covered calls. A major reason of choosing TZA is that it has weekly options which provides the opportunity to collect premium while price oscillate. Going forward Mike will trigger the long EWA alerts and I will trigger the short side triggers as courtesy alerts to members.


June 16, 2016

Market Update:

Market Update: Thanks for the great feedback on last night’s training. I agree that this new Trend Candle and understanding of the market’s repeating ebbs and flows will greatly improve both entries and exits. If you missed the training find it under the Training Video tab at: http://activetrendtrading.com/training-webinar-recordings/ .

The Market woke up with indigestion from yesterday’s Fed and the upcoming Brexit vote in Great Britain. Is the real story or was the market just looking for an excuse to continue working off an overbought conditions going into the summer months? For traders understanding the why behind the price action is less important than having a plan when the action presents itself. Today’s action could have been very unsettling if anyone had significant long side exposure. We of course have been light the market for most of this year so today actually into a nice winning day buying back several weekly options for weekly profits.

The SPX chart below shows how yesterday’s selloff continued into the after/pre-market hours so the open was a gap down and selloff to support around the 100 day moving average. This zone of support provided the launch platform for the rally into the close where price finished above the 50 day EMA. If today’s action becomes a new swing low, then we will start planning upside trades when the 8/20 day EMA cluster resistance is breached and/or the daily candles turn to blue. Both daily TSI and Momentum look like they want to bottom and move up. This can be a fake out with the weekly indicators favoring a stronger down move. Regardless, the action point for a downside entry will be near the 8/20 cluster on the daily chart.

SPX 6-16

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


Managing Existing Trades: Positions open for 3 strategies.

Strategy I Portfolio Building:

Position 1: Bought 240 shares of SIX on 6/7 as outlined by the text and email alert. Opened price at 57.45—Position up about 1.8% and running into resistance. While the technical are positive don’t want to give back up a full 4% stop loss. Setting new stop loss at $1.00 below 57.04
T1 = 5% -10% to close 120 Shares
T2 = Return to past resistance at $62
Stop Loss = 56.04
Stop Loss = 56.04 Hit 6/16 sold at 56.01 loss = -$245.60 or 2.5%

Position 2: Long 100 shares of TZA
Bought 200 shares of TZA at 41.60
T1 = 5% -10% to close 100 Shares
T2 = Attempt to hold remaining shares up to earnings and then close

Stop Loss = Will hold and sell weekly covered calls on remaining position to reduce cost basis while waiting for the Market downturn. Will hold until July 1st.

Hit T1 sold 100 shares at 43.79 for a gain of 5.26% or Profit of $219.00

Strategy II Income Generation:

TZA Trade: Sold 1 contracts of TZA 17Jun 37C at 0.74—Potential Profit $44
Thus far $106 has been cleared to reduce cost basis of the TZA position.

I will monitor volatility for a potential trade when VIX turns around. Right now there is very little fear in the market place!

Strategy II stocks of interest for this week: TSLA & Index ETF’s. Will reload with new candidates after this weekend’s review.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words, if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally, please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Additionally, it is crucial when selling premium against the Long LEAPS position that the premium collected cover the weekly cost of holding the LEAPS plus an additional amount to over this amount as a gain. This is one of the reason I sell premium of weekly options that are close to be “At The Money”. I base my selling on the expected move during the next week. If one is not bringing enough weekly premium this trade will not work out as well and may wind up being a losing trade.

Strategy III Weekly Results Week ending 6/17:
SPY: Profit +$226 with two positions to close
TSLA: Profit +$477 with two positions to close


Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 19.89%; Premium Collected since opening trade on 1/4/16 = $4,896

Sold 4 contracts of SPY 17Jun 207P at 1.78—Potential Profit $712
Closed 2 contracts at 0.65 for profit of $226

Trade 2: Long TSLA Jan17 250C & Long Jan17 220 + New Positions Jan17 210C and 220P: Current Position Total Invested $14,900
Currently Up 48.76%: Premium Collected since opening trade on 9/28/15 = $12,132 + New Positions at $1061 = Total Collected $13,193

Sold 1 contracts of TSLA 17Jun 217.5P at 3.45—Potential Profit $345
Sold 1 contracts of TSLA 17Jun 215P at 2.54—Potential Profit $254

Sold 1 contracts of TSLA 17Jun 222.5C at 3.25—Potential Profit $325
Closed at 0.50 for a profit of $275

Sold 1 contracts of TSLA 17Jun 225C at 2.32—Potential Profit $232
Closed at 0.30 for a profit of $202

Update: Purchased the TSLA 20Jan 17 210C/220P Strangle at $5890 to increase exposure to Strategy III moving forward. Having multiple positions to sell premium against provides some additional opportunities for growth. I will again protect the downside with a stop loss of $4.90 over the amount of premium collected. The average amount I’ll need to generate on this portion of the trade is $350 per week.


Pre-Earnings Trade: No weekly candidates.

Pre-earnings trades can be a great supplement to the portfolio building portion of Strategy I. Depending on the stock and technical analysis they tend to be predictable and repeatable. For busy traders focusing on pre-earning opportunities can free one up from the necessity of constantly chasing stocks during other periods of the year. The process repeats four times a year and capturing a 5%-15% return four times a year can compound very nicely!

Potential Set Ups for this week: Initial reaction to the Fed dovishness is interesting. Tomorrow is Triple Witching day for the markets which tends to have an upside bias. With the magnitude of the Index fall we do not need to enter any long stock position as the Indexes settle out. Another volatile week coming next week with the Brexit vote. Will continue to be interesting and will probably yield only short term setups.

One observation over the past few weeks is that many stocks are showing ‘V’ bottoms. This type of bottom tends to be weak and can provide some violent correction once the momentum starts running out. Because of this we need to adjust expectations for returns on individual trades to smaller profit targets and tight stops. 5% – 15% are great objectives for initial targets and if hit setting breakeven stop losses is prudent.

Upside: Currently getting pullback, waiting for solid setups. TSLA formed a Hammer reversal signal on the daily chart today. This pattern is bullish and locates strong support. We will see if this is the rebound zone. Overall TSLA’s Trend Candles are Red. Additionally keep an eye on CME, nice Bullish Engulfing today which may be winding up for a move up to about 106.00.

Downside: Some very strong weak candidates for this week if the Indexes continue to weaken. These include: NFLX, SBUX, TSLA (prime candidate), MA, NTES and BIDU

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (270 resistance/140 support), NFLX, BIDU, MA, V (Visa may provide some upside opportunities because several companies like Costco are transitioning from American Express to Visa), LNKD, BABA, BIDU, OLLI, AMZN, and FB.

Stocks identified by ** that are close to a potential entry point.

Early Warning Alerts for Leveraged Index ETFs: Waiting for New Entry trigger and Alert reset.

A downside trade for TZA triggered on 5/17 and a courtesy alert was sent to all EWA members. I plan on holding this position until July 1st or until price hits $55. During this time rather than a stop loss I will sell weekly covered calls. A major reason of choosing TZA is that it has weekly options which provides the opportunity to collect premium while price oscillate. Going forward Mike will trigger the long EWA alerts and I will trigger the short side triggers as courtesy alerts to members.


June 14, 2016

Good Day Traders,

Market Update: Over the past 4 days the SPX has sold off over 2.5% at today’s lows. But the Fib Box functioned as expected providing support after an approximate 2/3’s retracement of the May/June rally. Is this just a regular reaction pullback that will lead the way for a renewed uptrend or will the Fed announcement provide just enough momentum to suck buyers back into the party before opening the trap door? We shall see. With limited options for the Fed, about the only thing that would stoke the market upside momentum would be a very, very dovish statement by Janet Yellen.

I’m waiting until after the Fed announcement and market reaction over Thursday and Friday to let the proper trades surface. I did post the SPX daily chart showing that short term price action is still in a downtrend, but there was a daily reversal candle in the Magic Fib Box just short of the 61.8% retracement. Prices finished back above the 50 day EMA which is also positive. Another thing to keep in mind after the Fed is that this is Triple Witching Friday where monthly options expire, Indexes are rebalanced and rollover of futures contracts. Triple Witching Friday tend to have an upside bias and also provide some excellent volatility.

SPX 6-14

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


Managing Existing Trades: Positions open for 3 strategies.

Strategy I Portfolio Building:

Position 1: Bought 240 shares of SIX on 6/7 as outlined by the text and email alert. Opened price at 57.45—Position up about 1.8% and running into resistance. While the technical are positive don’t want to give back up a full 4% stop loss. Setting new stop loss at $1.00 below 57.04
T1 = 5% -10% to close 120 Shares
T2 = Return to past resistance at $62
Stop Loss = 56.04

Position 2: Long 100 shares of TZA
Bought 200 shares of TZA at 41.60
T1 = 5% -10% to close 100 Shares

T2 = Holding until July 1st as a minimum.

Stop Loss = Will hold and sell weekly covered calls on remaining position to reduce cost basis while waiting for the Market downturn. Will hold until July 1st.
Hit T1 sold 100 shares at 43.79 for a gain of 5.26% or Profit of $219.00

Strategy II Income Generation:

TZA Trade: Sold 1 contracts of TZA 17Jun 37C at 0.74—Potential Profit $44
Thus far $106 has been cleared to reduce cost basis of the TZA position.

I will monitor volatility for a potential trade when VIX turns around. Right now there is very little fear in the market place!

Strategy II stocks of interest for this week: TSLA & Index ETF’s. Will reload with new candidates after this weekend’s review.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words, if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally, please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Additionally, it is crucial when selling premium against the Long LEAPS position that the premium collected cover the weekly cost of holding the LEAPS plus an additional amount to over this amount as a gain. This is one of the reason I sell premium of weekly options that are close to be At The Money. I base my selling on the expected move during the next week. If one is not bringing enough weekly premium this trade will not work out as well and may wind up being a losing trade.

Strategy III Weekly Results Week ending 6/10:
SPY: Profit +$140
TSLA: Loss -$500

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 16.67%; Premium Collected since opening trade on 1/4/16 = $4,394
Sold 4 contracts of SPY 17Jun 207P at 1.78—Potential Profit $712
(Will buy back 2 contracts at 0.50 and 2 contracts at 0.25)

Trade 2: Long TSLA Jan17 250C & Long Jan17 220 + New Positions Jan17 210C and 220P: Current Position Total Invested $17,480
Currently Up 54%: Premium Collected since opening trade on 9/28/15 = $11,857 + New Positions at $859 = Total Collected $12,716
Sold 1 contracts of TSLA 17Jun 217.5P at 3.45—Potential Profit $345
Sold 1 contracts of TSLA 17Jun 215P at 2.54—Potential Profit $254
Sold 1 contracts of TSLA 17Jun 222.5C at 3.25—Potential Profit $325
Sold 1 contracts of TSLA 17Jun 225C at 2.32—Potential Profit $232


Update: Purchased the TSLA 20Jan 17 210C/220P Strangle at $5890 to increase exposure to Strategy III moving forward. Having multiple positions to sell premium against provides some additional opportunities for growth. I will again protect the downside with a stop loss of $4.90 over the amount of premium collected. The average amount I’ll need to generate on this portion of the trade is $350 per week.

I’m sitting tight on any potential new trades until after the Fed.


June 13, 2016

Good Day Traders,

Market Update: Fear seemed to rule the day on Monday! The SPX Volatility Index (VIX) spiked above 20 since the week of 2/29/16. As VIX was moving higher the three Tracking Indexes were selling off to lower levels of support. In addition to the Fed this week, the terrorist attack in Orlando served as a fear catalyst that kept the sellers in control all day. I will maintain my stance of non-commitment until after the Fed reports out on Wednesday.

On the SPX daily chart below the trend candles have red indicating a trend reversal is underway. On a weekly chart the candles have not turned red yet which would be indicative of a stronger potential sell-off. With the daily candles showing two days of hard selling and the 8/20 moving averages violated our job is simple, wait for a reaction move up to around either the 8 or 20 day EMA to plan a downside trade. If successful with an entry, then the downtrend can be ridden until hitting a profit target or the candles switch back to blue.

Additionally, note on the chart below how the price action broke through the 38.2% Fib Retracement from the low in May to the June high. With the breach of each Fib level it increases the probability that the next level will be hit. From today’s close to the 50% Retracement is a short distance so not a good time to jump on the downside train. Other levels of support that may come into play this week are the 50 day EMA and the bottom of the Keltner Channel.

Again NDX is the weakest of the three Tracking Indexes, but let’s see if the RUT catches up if market continues to slide.

SPX 6-13

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


Managing Existing Trades: Positions open for 3 strategies.

Strategy I Portfolio Building:

Position 1: Bought 240 shares of SIX on 6/7 as outlined by the text and email alert. Opened price at 57.45—Position up about 1.8% and running into resistance. While the technical are positive don’t want to give back up a full 4% stop loss. Setting new stop loss at $1.00 below 57.04
T1 = 5% -10% to close 120 Shares
T2 = Return to past resistance at $62
Stop Loss = 56.04

Position 2: Long 100 shares of TZA
Bought 200 shares of TZA at 41.60
T1 = 5% -10% to close 100 Shares

T2 = Holding until July 1st as a minimum.

Stop Loss = Will hold and sell weekly covered calls on remaining position to reduce cost basis while waiting for the Market downturn. Will hold until July 1st.
Hit T1 sold 100 shares at 43.79 for a gain of 5.26% or Profit of $219.00

Strategy II Income Generation:

TZA Trade: Sold 1 contracts of TZA 17Jun 37C at 0.74—Potential Profit $44
Thus far $106 has been cleared to reduce cost basis of the TZA position.

I will monitor volatility for a potential trade when VIX turns around. Right now there is very little fear in the market place!

Strategy II stocks of interest for this week: TSLA & Index ETF’s. Will reload with new candidates after this weekend’s review.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words, if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally, please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Additionally, it is crucial when selling premium against the Long LEAPS position that the premium collected cover the weekly cost of holding the LEAPS plus an additional amount to over this amount as a gain. This is one of the reason I sell premium of weekly options that are close to be At The Money. I base my selling on the expected move during the next week. If one is not bringing enough weekly premium this trade will not work out as well and may wind up being a losing trade.

Strategy III Weekly Results Week ending 6/10:
SPY: Profit +$140
TSLA: Loss -$500

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 16.67%; Premium Collected since opening trade on 1/4/16 = $4,394

Waiting for new weekly set up

Trade 2: Long TSLA Jan17 250C & Long Jan17 220 + New Positions Jan17 210C and 220P: Current Position Total Invested $17,480
Currently Up 54%: Premium Collected since opening trade on 9/28/15 = $11,857 + New Positions at $859 = Total Collected $12,716

Sold 1 contracts of TSLA 17Jun 217.5P at 3.45—Potential Profit $345
Sold 1 contracts of TSLA 17Jun 215P at 2.54—Potential Profit $254
Sold 1 contracts of TSLA 17Jun 222.5C at 3.25—Potential Profit $325
Sold 1 contracts of TSLA 17Jun 225C at 2.32—Potential Profit $232

Update: Purchased the TSLA 20Jan 17 210C/220P Strangle at $5890 to increase exposure to Strategy III moving forward. Having multiple positions to sell premium against provides some additional opportunities for growth. I will again protect the downside with a stop loss of $4.90 over the amount of premium collected. The average amount I’ll need to generate on this portion of the trade is $350 per week.


Pre-Earnings Trade: No weekly candidates.

Pre-earnings trades can be a great supplement to the portfolio building portion of Strategy I. Depending on the stock and technical analysis they tend to be predictable and repeatable. For busy traders focusing on pre-earning opportunities can free one up from the necessity of constantly chasing stocks during other periods of the year. The process repeats four times a year and capturing a 5%-15% return four times a year can compound very nicely!

Potential Set Ups for this week: Lot of upcoming events through the rest of June that could move the markets in either direction. With the Indexes weakening I’ll focus on downside candidates unless the news from the Fed drives the market back into an uptrend.

One observation over the past few weeks is that many stocks are showing ‘V’ bottoms. This type of bottom tends to be weak and can provide some violent correction once the momentum starts running out. Because of this we need to adjust expectations for returns on individual trades to smaller profit targets and tight stops. 5% – 15% are great objectives for initial targets and if hit setting breakeven stop losses is prudent.

Upside: Inverse Index ETFs, SPXU, SQQQ or TZA. Wait for pullback setup.

Downside: Some very strong weak candidates for this week if the Indexes continue to weaken. These include: NFLX, SBUX, TSLA (prime candidate), MA, NTES and BIDU

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (270 resistance/140 support), NFLX, BIDU, MA, V (Visa may provide some upside opportunities because several companies like Costco are transitioning from American Express to Visa), LNKD, BABA, BIDU, OLLI, AMZN, and FB.

Stocks identified by ** that are close to a potential entry point.

Early Warning Alerts for Leveraged Index ETFs: Waiting for New Entry trigger and Alert reset.
A downside trade for TZA triggered on 5/17 and a courtesy alert was sent to all EWA members. I plan on holding this position until July 1st or until price hits $55. During this time rather than a stop loss I will sell weekly covered calls. A major reason of choosing TZA is that it has weekly options which provides the opportunity to collect premium while price oscillate. Going forward Mike will trigger the long EWA alerts and I will trigger the short side triggers as courtesy alerts to members.


June 9, 2016

Good Day Traders,

Arrived in Hawaii Tuesday immediately went to Oceana to hook up hi-speed internet access and was hit with a week delay for the service man to come out. Fortunately, the other items of the move went well. Our car arrived a day before we did, but the furniture will not be here for another 5-6 weeks. So it’s folding chairs and table and a blowup bed until then. It will take a lot of elbow grease, sweat and repair to return our house to what it was before renting it out for 12 years.

Market Update: It appears that each of the Tracking Indexes may be pulling up for at least a rest or slight pullback. With many in the market convinced that there is no way the Fed can raise rates at next week’s meeting. Fear as measured by the Put/Call ratio and the VIX has dropped to low points which tend to coincide with short term uptrend coming to an end.

Each Index gapped down this morning due to several factors including dropping oil prices, concern over a potentially weakening recovery and indecision prior to the Fed meeting next week.

The NDX looks to be the weakest of the three Indexes and might lead the way to the downside if economic concerns materialize. The RUT would be next in line to observe for fresh weakness with the SPX holding above the other Indexes. Each of the Indexes are slowing at previous levels of resistance above all the moving averages. Momentum and the TSI on weekly charts look primed for a pullback with the daily charts beginning to align with these longer term time periods. Both daily TSI and Momentum are showing signs of rolling over. Between now and next Wednesday the path of least resistance may be sideways to slightly down. If the Fed makes noise about reducing interest rates, adding QE or dropping to negative rates the initial reaction may be positive. But if analyst really take a look at the internal a negative reaction could be the result!

I’ll sit tight and sell premium against the Long Strategy III SPY positions and waiting for a pullback to strong support or a total breakdown. The issue in placing long trades in either direction at this point is having the gumption to stand the heat if the position doesn’t quickly move in the desired direction!

All three Indexes showed at best indecisive candlesticks today and at worst a Bearish Harami reversal pattern on the Russell. The daily chart of the SPX is reflective of action on all three Indexes. Price action gapped down from yesterday’s close and hit support and bounce weakly. Watch the short term uptrend line on the SPX for clues as to direction. As long as the trend line stays intact price action should move higher, but stronger resistance is very close. Lay in a Fibonacci Retracement from the low on 5/19 to the high on 6/8 to determine pullback targets at either the 38.2% or 50% retracement levels. These levels correspond to some established support zones.

SPX 6-9

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


Managing Existing Trades: Positions open for 2 strategies.

Strategy I Portfolio Building:

Position 1: Bought 240 shares of SIX on 6/7 as outlined by the text and email alert. Opened price at 57.45—Position up about 1.8% and running into resistance. While the technical are positive don’t want to give back up a full 4% stop loss. Setting new stop loss at $1.00 below 57.04
T1 = 5% -10% to close 120 Shares
T2 = Return to past resistance at $62
Stop Loss = Set at 56.04

Position 2: Long 100 shares of TZA
Bought 200 shares of TZA at 41.60
T1 = 5% -10% to close 100 Shares
T2 = Attempt to hold remaining shares up to earnings and then close
Stop Loss = Will hold and sell weekly covered calls on remaining position to reduce cost basis while waiting for the Market downturn. Will hold until July 1st.

Hit T1 sold 100 shares at 43.79 for a gain of 5.26% or Profit of $219.00

Strategy II Income Generation:

TZA Trade: Sold 1 contracts of TZA 10Jun 37.5C at 0.44—Potential Profit $44
Thus far $66 has been cleared to reduce cost basis of the TZA position. Bought back 6/8 at 0.04 for a $40 profit—Total Premium Collected so far = $106

Speculative Trade going on VXX – This position will be closed on 5/31 for a loss due to volatility staying low! Closed at 0.50 for a loss of
Opened speculative trade with the expectation that volatility will pick up between now and June. Bought 5 contracts of VXX Jun 19C at 1.42
Will let this trade play out over the next 4-5 weeks. Closed 5/31 at 050 for loss of $490.

I will monitor volatility for a potential trade when VIX turns around. Right now there is very little fear in the market place!

Strategy II stocks of interest for this week: TSLA & Index ETF’s. Will reload with new candidates after this weekend’s review.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

 

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words, if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally, please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Strategy III Weekly Results Week ending 6/10:
SPY: Waiting to close position and open next week’s credit
TSLA: Loss -$500

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 12.82%; Premium Collected since opening trade on 1/4/16 = $4418.

Sold 4 contracts of SPY 10Jun 210C at 1.08—Potential Profit $432

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 57.59%; Premium Collected since opening trade on 9/28/15 = $11,515

Sold 1 contracts of TSLA 10Jun 217.5C at 4.20—Potential Profit $420
Stopped out 6/7 at 9.10 = Loss of $500

With Strategy III continuing to do well for this year, I will add to the TSLA long positions. I will buy one contract each of the 20Jan17 220P and 210C for at a cost of approximately 60.33 or $6033 for the two contracts. I will then sell 2 contracts per week on either side of the long Strangle. Note that the one of the long options for this new position will finish in the money and thus add to the return on January 20th. I’ll start a new table to track this trade.

Update: Purchased the TSLA 20Jan 17 210C/220P Strangle at $5890 to increase exposure to Strategy III moving forward. Having multiple positions to sell premium against provides some additional opportunities for growth. I will again protect the downside with a stop loss of $4.90 over the amount of premium collected. The average amount I’ll need to generate on this portion of the trade is $350 per week.

Pre-Earnings Trade: Retail stocks will start to report earnings soon to close out the current earnings season. The weekend Trader’s Report will highlight any potential candidates.

Pre-earnings trades can be a great supplement to the portfolio building portion of Strategy I. Depending on the stock and technical analysis they tend to be predictable and repeatable. For busy traders focusing on pre-earning opportunities can free one up from the necessity of constantly chasing stocks during other periods of the year. The process repeats four times a year and capturing a 5%-15% return four times a year can compound very nicely!

Potential Set Ups for this week: The June Fed is next week so stocks may maintain a holding pattern from now through next Wednesday. We will see what kind of a catalyst emerges from the Fed!

One observation over the past few weeks is that many stocks are showing ‘V’ bottoms. This type of bottom tends to be weak and can provide some violent correction once the momentum starts running out. Because of this we need to adjust expectations for returns on individual trades to smaller profit targets and tight stops. 5% – 15% are great objectives for initial targets and if hit setting breakeven stop losses is prudent.

Upside: The weekend Trader’s Report will highlight potential candidates.

Downside: Short term downside trades on SPY, QQQ, or IWM. The inverse Index ETF’s may provide some short term trades if the market pulls back this week. TSLA may get a jolt tomorrow with safety concerns making the news just as the market closed. If the current short term uptrend fails, look for potential downward opportunities. NFLX is also struggling after bouncing down from a longer term downtrend line.

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (270 resistance/140 support), NFLX, BIDU, MA, V (Visa may provide some upside opportunities because several companies like Costco are transitioning from American Express to Visa), LNKD, BABA, OLLI, NOAH, CRM, AMZN, FB and AOS.

Stocks identified by ** that are close to a potential entry point.

Early Warning Alerts for Leveraged Index ETFs: Waiting for Second Chance Entry trigger and Alert reset.

A downside trade for TZA triggered on 5/17 and a courtesy alert was sent to all EWA members. I plan on holding this position until July 1st or until price hits $55. During this time rather than a stop loss I will sell weekly covered calls. A major reason of choosing TZA is that it has weekly options which provides the opportunity to collect premium while price oscillate. Going forward Mike will trigger the long EWA alerts and I will trigger the short side triggers as courtesy alerts to members.


May 26, 2016

Good Day Traders,

Market Update: With Monday being a market holiday my main objective tomorrow is to sell option premium for Strategy III. Tomorrow may be a very interesting day with GDP report and then at about 11:15 a.m. PDST our friend Janet give a speech. We will see if she echoes the views of some of the Fed Presidents and talks up the potential of a June rate hike. It does seem that the Fed is attempting to get out as many talking heads as possible prior to the meeting in mid-June. It will be interesting to watch the Market’s reaction to her speech, but I’m not going to be swayed one way or another to take action solely based on Janet’s words.

Today’s blistering up-move hit a resistance zone and stopped. The Indexes were mixed so this may be the beginning of a two week sideways move prior to the Fed meeting mid-June. Heard a great quote today that kind of sums up where we may currently be in the market. Is was, “Are the Bulls out of bullets and are the Bears too shot up to care?” It seems that there are currently two very vocal camps the Bears shouting gloom and doom, and the Bulls who see the economy as robust and growing strongly. Each can point to data to support their position but the Market will do what the Market will do. Current the Tracking Indexes are turning their moving averages up and approaching resistance from last year’s highs. If neither side wins the battle we may be in for a long hot summer of scrimmages between support and resistance in a sideways move.

The SPX today finished with a Bearish Harami which is a reversal signal, but these reversal signals have not been working as well in this current market environment so a confirmation is required prior to taking any action. Unfortunately, with the Market’s over-reacting moves for no apparent reason, choosing a trade for even a short term trade has been challenging. It’s not time to buy or short the market until price proves direction at support and resistance.

On all three Tracking Indexes daily Momentum turned down today as the TSI hesitated in its climb. Neither of these are reason to take action what might be an initial clue that the current rapid rise has reached its climax. We will see if the push up stalls or accelerates again.

spx 5-26

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


Managing Existing Trades: Positions open for 3 strategies.

Strategy I Portfolio Building: Long 100 shares of TZA

Bought 200 shares of TZA at 41.60
T1 = 5% -10% to close 100 Shares
T2 = Attempt to hold remaining shares up to earnings and then close
Stop Loss = Will hold and sell weekly covered calls on remaining position to reduce cost basis while waiting for the Market downturn. Will hold until July 1st. This will provide 8 weeks to sell covered calls to offset cost. For those who were stopped out of this trade today, I will continue to report on this trade as I hold going forward. I expect this to be a rocky ride and may take a rate hike by the Fed to put fear back into the market.
Hit T1 sold 100 shares at 43.79 for a gain of 5.26% or Profit of $219.00
Waiting for a covered call set up.

Strategy II Income Generation:

I opened a demonstrating trade today in SRPT. I sold an Iron Condor Straddle (short put and call the same strike price) for $8.20. SRPT finds out this Thursday if a new drug is approved. If the price stays within $8.2 of $18 by Friday, I can close this trade breakeven. The volatility today closed at 900% for this week’s option chain. This is huge! I’m risking $1.80 to potentially earn $8.20
Bought back SRPT Iron Condor Collar as Implied Volatility evaporated when the drug approval was delayed at 4.10 netting a profit of $410
Speculative Trade going on VXX

Opened speculative trade with the expectation that volatility will pick up between now and June. Bought 5 contracts of VXX Jun 19C at 1.42
Will let this trade play out over the next 4-5 weeks. I will close out 3 contracts at 2.84.

The timing on this VXX trade may have been a tad early so I’ll be looking for a potential trade in a month further in the future.

Strategy II stocks of interest for this week: TSLA, SPX & Index ETFs.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

 

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words, if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally, please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 15.89%; Premium Collected since opening trade on 1/4/16 = $4608.

Sold 4 contracts of SPY 27 May 206.5C at 1.07—Potential Profit $428
I will tighten my stop on this trade to $1.00 tomorrow given today’s big move. Stopped out and bought back at 1.42 for a loss of $540

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 58.12%; Premium Collected since opening trade on 9/28/15 = $11,131

Sold 1 contracts of TSLA 27 May 220C at 4.15—Potential Profit $415
If TSLA strengthens I want to exit this trade with profit so I’ll move my stop to $3.50
Bought back at $3.25 for a weekly profit of $90

Because of the long weekend I want to sell bot Call and Put premium on both SPY and TSLA on Friday 5-27.

Pre-Earnings Trade: Will reset the Pre-Earnings Watch List this weekend. AVGO did well this week with no entry opportunity.

Pre-earnings trades can be a great supplement to the portfolio building portion of Strategy I. Depending on the stock and technical analysis they tend to be predictable and repeatable. For busy traders focusing on pre-earning opportunities can free one up from the necessity of constantly chasing stocks during other periods of the year. The process repeats four times a year and capturing a 5%-15% return four times a year can compound very nicely!

Potential Set Ups for this week: Will reset the Upside and Downside Candidates this weekend. With the June Fed meeting is on the horizon so stocks may maintain a holding pattern waiting to see if the Fed raises rates. On the stocks that rallied hard with the market and broke about their 8-day MA’s the proper set up is a pullback close to the 8-day or an identifiable level of support.

Upside: Waiting for Weekend Reset

Downside: Waiting for Weekend Reset

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (270 resistance/140 support), SIX, PYPL, LNKD, BABA, OLLI, NOAH, CRM, AMZN, FB and AOS.

Stocks identified by ** that are close to a potential entry point.

Early Warning Alerts for Leveraged Index ETFs: Waiting for Second Chance Entry trigger and Alert reset.

A downside trade for TZA triggered on 5/17 and a courtesy alert was sent to all EWA members. I plan on holding this position until July 1st or until price hits $55. During this time rather than a stop loss I will sell weekly covered calls. A major reason of choosing TZA is that it has weekly options which provides the opportunity to collect premium while price oscillate. Going forward Mike will trigger the long EWA alerts and I will trigger the short side triggers as courtesy alerts to members.


May 24, 2016

Good Day Traders,

Over the next couple of weeks, the Market Update will be abbreviated due to my moving. I will continue to monitor the market, current trades and send out alerts. Like always pay attention to the follow up email alert after receiving the initial Text Alert. The email alert sets out the parameters for the trade including managing profit targets and stop losses. I do not send out text alerts to exit trades, may expectation is that members will use the email alert to place conditional orders.

Market Update: The Bearish reversal candlestick patterns exhibited yesterday were voided today with a strong move through short term resistance. This short term resistance formed a downward sloping trend line which the markets sliced through and closed above today. Price on the Tracking Indexes stopped at other horizontal resistance to take a breather after today’s big move. Will tomorrow bring more buying or will sellers step in at stronger resistance levels?

The SPX covered most of today’s move in the first hour of trading and then crept higher the remainder of the day. Volatility dropped thus showing there is a lack of fear in the market. Now that there is a close above the 8 and 20 day EMA’s they will be used for potential entry signals to the upside. Stalling at a zone between the 2080 and 2085 levels with now pullback may be an indication that the rapid move up is simply a reaction move and not based soundness of the Index. For today the battle was won by the bulls.

NDX look for upside setups on a pullback to the middle third of today’s price action. Resistance is in play between 4450 and 4538. The Russell also made a big move today up from the 8 and 20 day moving average cluster. A resistance zone is set between the downtrend line at 1145 and the last swing high at the 1156 level.

The daily chart below shows the SPX. It is very similar to the other indexes showing a break above the recent short term downtrend. While many are watching this rally in disbelief because many, including us have been talking about the top that is still place, the market is a great destroyer and can push up until all the downside advocates turn bullish. At the point the market will turn to the downside. At this point it does not appear we are there.

SPX 5-24

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


Managing Existing Trades: Positions open for 3 strategies.

Strategy I Portfolio Building: Long 100 shares of TZA

Bought 200 shares of TZA at 41.60
T1 = 5% -10% to close 100 Shares
T2 = Attempt to hold remaining shares up to earnings and then close
Stop Loss = Will hold and sell weekly covered calls on remaining position to reduce cost basis while waiting for the Market downturn. Will hold until July 1st. This will provide 8 weeks to sell covered calls to offset cost. For those who were stopped out of this trade today, I will continue to report on this trade as I hold going forward. I expect this to be a rocky ride and may take a rate hike by the Fed to put fear back into the market.
Hit T1 sold 100 shares at 43.79 for a gain of 5.26% or Profit of $219.00
Waiting for a covered call set up.

Strategy II Income Generation:

I opened a demonstrating trade today in SRPT. I sold an Iron Condor Straddle (short put and call the same strike price) for $8.20. SRPT finds out this Thursday if a new drug is approved. If the price stays within $8.2 of $18 by Friday, I can close this trade breakeven. The volatility today closed at 900% for this week’s option chain. This is huge! I’m risking $1.80 to potentially earn $8.20

Speculative Trade going on VXX
Opened speculative trade with the expectation that volatility will pick up between now and June. Bought 5 contracts of VXX Jun 19C at 1.42

Will let this trade play out over the next 4-5 weeks. I will close out 3 contracts at 2.84.

The timing on this VXX trade may have been a tad early so I’ll be looking for a potential trade in a month further in the future.

Strategy II stocks of interest for this week: TSLA, SPX & Index ETFs.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words, if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally, please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Strategy III Weekly Results Week ending 5/20:
SPY: Profit + $456
TSLA: Profit + $310

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 15.89%; Premium Collected since opening trade on 1/4/16 = $4608.
Sold 4 contracts of SPY 27 May 206.5C at 1.07—Potential Profit $428
I will tighten my stop on this trade to $1.00 tomorrow given today’s big move.

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 58.12%; Premium Collected since opening trade on 9/28/15 = $11,131
Sold 1 contracts of TSLA 27 May 220C at 4.15—Potential Profit $415
If TSLA strengthens I want to exit this trade with profit so I’ll move my stop to $3.50

 

Pre-Earnings Trade: So far our pre-earnings trades have worked out well for both Strategies I and III. The following have promise for Pre-Earning trades: OLLI, THO, AVGO & FIVE

AVGO hit 151.68 today and may pull back for a second chance entry for the pre-earnings run.

Pre-earnings trades can be a great supplement to the portfolio building portion of Strategy I. Depending on the stock and technical analysis they tend to be predictable and repeatable. For busy traders focusing on pre-earning opportunities can free one up from the necessity of constantly chasing stocks during other periods of the year. The process repeats four times a year and capturing a 5%-15% return four times a year can compound very nicely!

Potential Set Ups for this week: The market appears to have chosen a direction which is up. At least for today. With the June Feb meeting is on the horizon so stocks may maintain a holding pattern waiting to see if the Fed raises rates. On the stocks that rallied hard with the market and broke about their 8-day MA’s the proper set up is a pullback close to the 8-day or an identifiable level of support.

Upside: LGND, FB, OLED, GIMO, and SIX

Downside: If the Indexes pullback from current resistance zone look for weak stocks or go to the inverse Index ETFs. Some weak stocks include: TREX, VNTV, SONC, BIDU, AAPL and NFLX

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (270 resistance/140 support), ALK (reversion to mean trade), PYPL, LNKD, BABA, OLLI, NOAH, CRM, AMZN, FB and AOS.

Stocks identified by ** that are close to a potential entry point.

Early Warning Alerts for Leveraged Index ETFs: Waiting for Second Chance Entry trigger and Alert reset.

A downside trade for TZA triggered on 5/17 and a courtesy alert was sent to all EWA members. I plan on holding this position until July 1st or until price hits $55. During this time rather than a stop loss I will sell weekly covered calls. A major reason of choosing TZA is that it has weekly options which provides the opportunity to collect premium while price oscillate. Going forward Mike will trigger the long EWA alerts and I will trigger the short side triggers as courtesy alerts to members.

 

 


May 23, 2016

Good Day Traders,

Market Update: A beautiful day of indecision for the three Tracking Indexes. The resistance and support provided by the various moving averages is starting to squeeze together and a breakout move can be expected but which way? Signals on the TSI and Momentum Oscillators are also mixed across time frames with the shorter term daily chart looking like they want to support a move up while the weekly’s look to support more downside. Because the weekly charts are longer term those clues have more weight. Of course the big but is that price action can still work higher within the confines of a longer term downtrend. Waiting for rebounds down from strong resistance is prudent.

The daily chart of the SPX shows very muted price action today. The next few days will be very telling. With price respecting the 8 and 20 day EMA’s in the middle of the downward sloping price channel a stronger downward break would seem to have a higher probability than a breakout to new highs. Today the 50 day moving average acted as support but buying did not move price back up towards the end of the day. Economic reports towards on Thursday and Friday may provide some fuel for a move up or down, but price may also go in to a holding pattern with in the downward sloping trend channel waiting for the Fed decision on June 15th.

One thing to note it that the extreme levels on the Put/Call ratio has backed off very quickly as the Indexes posture in preparation for the next move. Which at this time looks to favor the downside, but the market does like to surprise us!

Both the NDX and RUT showed Shooting Star reversal candles at resistance. If this confirms to the downside, then watch for a fall back to strong support. If support breaks look for a 50% retracement of the move from mid-February to the highs in April.

SPX 5-23

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


Managing Existing Trades: Positions open for 3 strategies.

Strategy I Portfolio Building: Open—100 shares of TZA

Bought 200 shares of TZA at 41.60
T1 = 5% -10% to close 100 shares—Sold 100 shares at 43.79 for gain of 5.26% for booked profit of $219

T2 = If market is turning over I want to participate with the remaining shares. Will target holding for the next 8-10 weeks or until $55 is reached then will trail a 10% stop.
Stop Loss = Will sell weekly covered calls on remaining 100 shares for next 8-10 weeks if market delays in moving lower.

Hit T1 sold 100 shares at 43.79 for a gain of 5.26% or Profit of $219.00

If the current support holds we may want to buy another 100 shares of TZA.

 

Strategy II Income Generation:

Sold 1 contract weekly TZA 20 May 44C at 0.71, bought back at 0.08 for a profit of $63

Speculative Trade going on VXX
Opened speculative trade with the expectation that volatility will pick up between now and June. Bought 5 contracts of VXX Jun 19C at 1.42
Will let this trade play out over the next 4-5 weeks. I will close out 3 contracts at 2.84.

The timing on this VXX trade may have been a tad early so I’ll be looking for a potential trade in a month further in the future.

Strategy II stocks of interest for this week: TSLA, SPX & Index ETFs.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words, if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally, please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Strategy III Weekly Results Week ending 5/20:
SPY: Profit + $456
TSLA: Profit + $310

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 15.89%; Premium Collected since opening trade on 1/4/16 = $4608.
Sold 4 contracts of SPY 27 May 206.5C at 1.07—Potential Profit $428

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 58.12%; Premium Collected since opening trade on 9/28/15 = $11,131
Sold 1 contracts of TSLA 27 May 220C at 4.15—Potential Profit $415


Pre-Earnings Trade: So far our pre-earnings trades have worked out well for both Strategies I and III. The following have promise for Pre-Earning trades: OLLI, THO, AVGO & FIVE

AVGO hit 150 today and may pull back for a second chance entry for the pre-earnings run.

Pre-earnings trades can be a great supplement to the portfolio building portion of Strategy I. Depending on the stock and technical analysis they tend to be predictable and repeatable. For busy traders focusing on pre-earning opportunities can free one up from the necessity of constantly chasing stocks during other periods of the year. The process repeats four times a year and capturing a 5%-15% return four times a year can compound very nicely!

Potential Set Ups for this week: Until the market chooses a direction stock candidate may be few. With the June Feb meeting is on the horizon so stocks may maintain a holding pattern waiting to see if the Fed raises rates. What kind of a catalyst might that be? One observation over the past few weeks is that many stocks are showing ‘V’ bottoms. This type of bottom tends to be weak and can provide some violent correction once the momentum starts running out. Because of this we need to adjust expectations for returns on individual trades to smaller profit targets and tight stops. 5% – 15% are great objectives for initial targets and if hit setting breakeven stop losses is prudent.

Upside: LGND, OLED, GIMO, SIX, TZA, SQQQ and SPXU.

Downside: If the Indexes pullback from current resistance zone look for weak stocks or go to the inverse Index ETFs. Some weak stocks include: TREX, VNTV, SONC, BIDU, AAPL and NFLX

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (270 resistance/140 support), ALK (reversion to mean trade), PYPL, LNKD, BABA, OLLI, NOAH, CRM, AMZN, FB and AOS.

Stocks identified by ** that are close to a potential entry point.

Early Warning Alerts for Leveraged Index ETFs: Waiting for Second Chance Entry trigger and Alert reset.

A downside trade for TZA triggered on 5/17 and a courtesy alert was sent to all EWA members. I plan on holding this position for the next 8-10 week or until price hits $55. During this time rather than a stop loss I will sell weekly covered calls. A major reason of choosing TZA is that it has weekly options which provides the opportunity to collect premium while price oscillate. Going forward Mike will trigger the long EWA alerts and I will trigger the short side triggers as courtesy alerts to members.

 


May 17, 2016

Good Day Traders,

Market Update: The SPX and NDX came to edge of the ledge and stopped today, but the RUT broke through. While today was a bearish day all three have yet to dramatically let go to the downside. Words for Fed Hawks seemed to be the primary catalyst today’s sell off. Notice how price action is starting to get into the rhythm of big up days followed by big down days. This is not a market in balance. Check out the SPX chart from May 2008. Mid-month the Index began its plunge that resulted in the Bear Market. Are we in for a similar ride? The Fed seems to have its back to the wall again. They want to start raising rates based on the revised data they analyze while other measurements are showing that the economy is not nearly as strong as the “cooked” data portrays. Interesting predicament!

For the SPX today’s action brought price to the edge of the ledge. The expected bullish bias for monthly expiration week is not working out as expected so far this week. A Bearish Head & Shoulders pattern has formed but the neckline is still intact. Price action finished just below the 50 day EMA but appears to be ready to bounce on the intraday hourly chart. Currently resistance at the 8/20 day EMA cluster is holding and continuing to rollover. What we may see through the remainder of the week is more of the tug-of-war between buyers and sellers gyrating price action between current support and resistance.

Because the NDX is below all the major indexes it is much weaker than the SPX. Today’s price action found support at the 4311 level. This level forms the ledge for NDX and a break of this level may lead to a drop to the 4232 level which is the 50% retracement from the February low to the April high. Like the other two Indexes signals are still mixed between daily & weekly oscillators.

I’m placing my downside focus on the Russell because did drop off the ledge today. I expect it to be a rocky road as it falls but started building a downside position in TZA the levered inverse Index ETF for the RUT. If this fall maintains symmetry with the fall in October/November of last year this trade could work out very well. The break below 1100 sets up for an initial fall to the 50% Fib Retracement at the 1074 level. I will do two things with this trade. First I will take profits as prices move in the preferred direction and secondly add to the position on pullbacks to the moving average cluster that’s forming.

SPX 5-17

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


Managing Existing Trades: Positions open for 3 strategies.

Strategy I Portfolio Building: Open—100 shares of TZA

Bought 200 shares of TZA at 41.60
T1 = 5% -10% to close 100 shares—Sold 100 shares at 43.79 for gain of 5.26% for booked profit of $219

T2 = If market is turning over I want to participate with the remaining shares. Will target holding for the next 8-10 weeks or until $55 is reached then will trail a 10% stop.
Stop Loss = Will sell weekly covered calls on remaining 100 shares for next 8-10 weeks if market delays in moving lower.

 

Strategy II Income Generation: Speculative Trade going on VXX

Opened speculative trade with the expectation that volatility will pick up between now and June. Bought 5 contracts of VXX Jun 19C at 1.42
Will let this trade play out over the next 4-5 weeks. I will close out 3 contracts at 2.84.
The timing on this VXX trade may have been a tad early so I’ll be looking for a potential trade in a month further in the future.

Strategy II stocks of interest for this week: TSLA, SPX & Index ETFs.

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words, if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally, please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Strategy III Weekly Results Week ending 5/13:
SPY: Profit + $518
TSLA: Profit + $110

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 11.62%; Premium Collected since opening trade on 1/4/16 = $4082.
Sold 4 contracts of SPY 20 May 204.5P at 1.25—Potential Profit $500

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 53.64%; Premium Collected since opening trade on 9/28/15 = $10,188

Sold 1 contract of TSLA 20 May 207.5P at 3.90—Potential Profit $390


Pre-Earnings Trade: So far our pre-earnings trades have worked out well for both Strategies I and III. The following have promise for Pre-Earning trades: OLLI, SWHC, PLAY & VEEV

Pre-earnings trades can be a great supplement to the portfolio building portion of Strategy I. Depending on the stock and technical analysis they tend to be predictable and repeatable. For busy traders focusing on pre-earning opportunities can free one up from the necessity of constantly chasing stocks during other periods of the year. The process repeats four times a year and capturing a 5%-15% return four times a year can compound very nicely!

Potential Set Ups for this week: In the coming weeks I will start listing fewer stocks but with greater detail on set ups. My objective is to provide members with a list with identified entry zones and exit targets. Each member will have a select group of stocks and can pre-plan additional trades in addition to those that come out via the alerts. I’m targeting having this feature in place by mid-June. I will then track each of the picks until they fall off the list. Please provide me comments on your thoughts regarding this new feature.

Keep an eye on SIX to the upside. Good consolidation with a buy point at today’s low or breaking out above the 8 day EMA at 58.32. Also watch LGND, BABA, and TZA. Additionally, I will focus on TSLA and Index ETF’s or their derivatives for each of the Strategies because of their patterns are established.

Upside: SIX**, LGND**, NVDA, NTES, OLLI, BABA**, FB, TZA, SQQQ and SPXU.

Downside: If the Indexes pullback from current resistance zone look for weak stocks or go to the inverse Index ETFs. Some weak stocks include: AYI, EW, MAS, THO, SONC, BIDU, AAPL and NFLX

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (270 resistance/140 support), ALK (reversion to mean trade), PYPL, LNKD, BABA, OLLI, NOAH, CRM, AMZN, FB and AOS.

Stocks identified by ** that are close to a potential entry point.

Early Warning Alerts for Leveraged Index ETFs: Waiting for Second Chance Entry trigger and Alert reset.

A downside trade for TZA triggered today and a courtesy alert was sent to all EWA members. I plan on holding this position for the next 8-10 week or until price hits $55. During this time rather than a stop loss I will sell weekly covered calls. A major reason of choosing TZA is that it has weekly options which provides the opportunity to collect premium while price oscillate. Going forward Mike will trigger the long EWA alerts and I will trigger the short side triggers as courtesy alerts to members.


May 16, 2016

Good Day Traders,

Market Update: Each of the Tracking Indexes pushed higher despite weak manufacturing data and the Fed talking up a rate hike in June! Interesting how the news that Warren Buffett has a large holding in AAPL overshadowed the otherwise lackluster news. Regardless we must always assess the charts and what they are telling us.

The SPX successfully bounced off the 50 day EMA and closed slightly above the 8/20 day EMA cluster. As I said in the Trader’s Report the week of monthly option typically has a bullish bias and today’s action was bullish. The question is how much further will price rise? The SPX daily chart shows that there is a downward sloping resistance line that comes into play at the 2075 level. The support level provided by the bottom of the triangle formation held and led the bounce today. If after this week weakness comes back into this Index, then building a position in either a SPY Put or going long the SPXU may be a prudent move. It would certainly help us be prepared if the Fed does raise rates in June. I would go out at least to July or August on the SPY Puts.

The NDX stopped dead in the water at the moving average cluster made up of the 20, 50, 100 and 200 day moving average. Above this resistance is a second level of resistance at 4400. The Russell also bounced off of support and stopped at resistance of the 8, 20 and 200 day moving average clusters. The current action on all three Indexes is bouncing between resistance and support. At some point the market will decide the path to follow either up or down.

For tomorrow’s market the intraday charts appear ready to pullback at least for a day. We shall see how this week turns out. If the bullish bias is muted, I’ll look for significant move downward next week. Similarities between now and 2008 are still in play for a big drop, but will the timing work out?

SPX 5-16

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


Managing Existing Trades: Positions open for two strategies.

Strategy I Portfolio Building: No Open Strategy I Positions

Strategy II Income Generation: Speculative Trade going on VXX

Opened speculative trade with the expectation that volatility will pick up between now and June. Bought 5 contracts of VXX Jun 19C at 1.42
Will let this trade play out over the next 4-5 weeks. I will close out 3 contracts at 2.84.
The timing on this VXX trade may have been a tad early so I’ll be looking for a potential trade in a month further in the future.

Strategy II stocks of interest for this week: TSLA, SPX & Index ETFs.

 

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words, if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally, please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Strategy III Weekly Results Week ending 5/13:
SPY: Profit + $518
TSLA: Profit + $110

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 11.62%; Premium Collected since opening trade on 1/4/16 = $4082.
Sold 4 contracts of SPY 20 May 204.5P at 1.25—Potential Profit $500

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 53.64%; Premium Collected since opening trade on 9/28/15 = $10,188
Waiting for set up.

 

Pre-Earnings Trade: So far our pre-earnings trades have worked out well for both Strategies I and III. The following have promise for Pre-Earning trades: SWHC, PLAY & VEEV

Pre-earnings trades can be a great supplement to the portfolio building portion of Strategy I. Depending on the stock and technical analysis they tend to be predictable and repeatable. For busy traders focusing on pre-earning opportunities can free one up from the necessity of constantly chasing stocks during other periods of the year. The process repeats four times a year and capturing a 5%-15% return four times a year can compound very nicely!

Potential Set Ups for this week: Keep an eye on SIX to the upside. Good consolidation with a buy point for today’s low to breaking out above the 8 day EMA at 58.32. Also watch LGND, BABA, and TZA. Additionally, I will focus on TSLA and Index ETF’s or their derivatives for each of the Strategies because of their patterns are established.

Upside: SIX**, LGND**, NVDA, NTES, OLLI, BABA**, FB, TZA, SQQQ and SPXU.

Downside: If the Indexes pullback from current resistance zone look for weak stocks or go to the inverse Index ETFs. Some weak stocks include: AYI, EW, MAS, THO, SONC, BIDU, AAPL and NFLX

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (270 resistance/140 support), ALK (reversion to mean trade), PYPL, LNKD, BABA, OLLI, NOAH, CRM, AMZN, FB and AOS.

Stocks identified by ** that are close to a potential entry point.

Early Warning Alerts for Leveraged Index ETFs: Waiting for Second Chance Entry trigger and Alert reset. As stated previously, if there are downside signals on the indexes that trigger a trade in one of the Inverse Index ETFs a courtesy alert will be sent out to both Early Warning and Premium Members.

 


May 12, 2016

Good Day Traders,

Market Update: It seems like each of the Indexes held on for dear life today after breaking support finding new support and then bouncing. It’s a little like an invisible rubber band is holding this market up and not letting it take the plunge. We believe there is some gamesmanship going on with an earnest effort by the Fed to assure the market doesn’t melt down prior to the election and this may be main strand of the that invisible rubber band. After all we would not want the economy to crash during President Obama’s final year in office. What would his legacy be then?

Today the Indexes were all down a bit after opening strong, selling off and then rebounding from support. I spent the day waiting for a downside entry but none presented themselves. The SPX is showing the formation of a Head & Shoulders but has yet to have a downward drop from the right shoulder. Price closed just below the 8/20 day EMA cluster with a spinning top doji a sign of indecision. Action over the past 2.5 weeks has also formed a triangle pattern with price currently stuck between support and resistance. We can trade at the boundaries if they are hit. Monthly option expiration takes place next week and this tends to have an upward bias. I will keep inspecting the one-hour intraday charts for entry clues but as of right now the intraday clues are also stuck between resistance and support.

The NDX bounced from a support zone just above the 4300 level. Today’s candle while not bullish does reflect where buyers came in to support this Indexes or the stocks in this Index. For tomorrow watch any test back to the 8 day EMA or 20 day EMA as a potential downside set up.

The Russell moved down and bounced close to the 100 day moving average. Like the NDX look to trade to the downside at resistance of the 8/20/200 day moving average cluster. With all the mixed signals current between daily and weekly charts I’m not in a hurry to go long the indexes with conviction that a big up move is just around the corner.

SPX 5-12

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


Managing Existing Trades: Positions open for two strategies.

Strategy I Portfolio Building: No Open Strategy I Positions

Bought 340 shares of FIVE at 40.18
T1 = 5% -10% to close 170 shares
T2 = Attempt to hold remaining shares up to earnings and then close
Stop Loss = 38.57
Earnings: 6/1 AMC
Stopped out at 38.52; Loss = $564.40

Strategy II Income Generation: Speculative Trade going on VXX

Opened speculative trade with the expectation that volatility will pick up between now and June. Bought 5 contracts of VXX Jun 19C at 1.42
Will let this trade play out over the next 4-5 weeks. I will close out 3 contracts at 2.84.
The timing on this VXX trade may have been a tad early so I’ll be looking for a potential trade in a month further in the future.

Strategy II stocks of interest for this week: TSLA, SPX & Index ETFs.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/
Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words, if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally, please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Strategy III Weekly Results Week ending 5/13:
SPY: Profit + $518
TSLA: Position Open

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 11.62%; Premium Collected since opening trade on 1/4/16 = $4082.

Sold 4 contracts of SPY 13 May 204.5P at 1.47—potential profit $588.
Closed 2 contracts at 0.15 and 2 at 0.20 for a profit of $518

Sold 4 contracts of SPY 20 May 204.5P at 1.25—Potential Profit $500

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 51.82%; Premium Collected since opening trade on 9/28/15 = $10,015
Sold 1 contracts of TSLA 13 May 212.5P at 5.20—potential profit $520.

 

Pre-Earnings Trade: So far our pre-earnings trades have worked out we ok for both Strategies I and III. The following have promise for Pre-Earning trades: THO**, AVGO**, DG, VEEV**, and DY.

Pre-earnings trades can be a great supplement to the portfolio building portion of Strategy I. Depending on the stock and technical analysis they tend to be predictable and repeatable. For busy traders focusing on pre-earning opportunities can free one up from the necessity of constantly chasing stocks during other periods of the year. The process repeats four times a year and capturing a 5%-15% return four times a year can compound very nicely!

Potential Set Ups for this week: Tomorrow is Friday which has become a slow day for the Indexes lately. With the Indexes currently stuck in no-man’s land between support and resistance I’ll be looking for trades at the extremes. Several breakout attempts this week have failed. The Indexes attempted to rebound today with mixed result. While a relief rally would set up some downside trades, if strong volume strength comes into the market price on individual stocks may bounce more significantly. Right now stocks with earnings coming up within the next 3-6 weeks are in play and moving. Little is propelling stocks that have reported earlier.

It seems that Monday and Fridays are turning into “do nothing” days with most movement taking place between Tuesday and Thursday. Waiting for the weekend review to reload with candidates. Stocks that bounced this week had little follow through. The list below contain several new stocks that look promising in either direction.

Upside: OLLI, BABA, FB, TZA, SQQQ and SPXU.

Downside: Some weak stocks include: BIDU, AAPL and NFLX

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (270 resistance/140 support), ALK (reversion to mean trade), PYPL, LNKD, BABA, OLLI, NOAH, CRM, AMZN, FB THO, TRU, TXRH and AOS. On 5/10 adding EXP.

Stocks identified by ** that are close to a potential entry point.

 


May 10, 2016

Good Day Traders,

Market Update: Each of the three Tracking Indexes showed strength today, but is it still just a relief rally into daily resistance or more? The NDX mounted a good charge on increased but not above average volume and now sits at the resistance formed by a cluster of moving averages including 20, 50, 100 and 200 day moving averages. It catches my eye that this upswing is fast and steep which is normally not to be a sign of strength but is reflective of upward thrust seen over the past few months. We can use the cluster of moving average as a zone to plan trades to the downside if they fail. A 61.8% retracement of the recent drop in the NDX would take prices back into resistance at the 4463 level. Today’s candlestick is a bullish move and no reversal signs are currently present. Price action closed just above the 50 day EMA.

The SPX pushed higher into resistance formed by a downward sloping resistance line. In addition, we have a steep uptrend support line formed by connecting the lows of the last 3 days. Price action finished close to the high for the day which is positive. Today’s price action was achieved on below average volume which was less than yesterday’s volume profile. This second point can be seen as a weakness.

The Russell recaptured the moving average cluster of the 8, 20 and 200 day moving averages. Like the other indexes daily and weekly charts are mixed. I will use the 1122 level as my benchmark for trading to the downside unless price pushes up to the 1130 or 1140 levels.

On each of the Indexes the last three days provide a flag like pattern which if broken to the downside this may also be a clue into when to jump on a short-side trade.

SPX 5-10

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


Managing Existing Trades: Positions open for all 3 strategies.

Strategy I Portfolio Building: Opened a pre-earnings position in FIVE on 5-9.
Bought 340 shares of FIVE at 40.18
T1 = 5% -10% to close 170 shares
T2 = Attempt to hold remaining shares up to earnings and then close
Stop Loss = 38.57
Earnings: 6/1 AMC

Strategy II Income Generation: Speculative Trade going on VXX

Opened speculative trade with the expectation that volatility will pick up between now and June. Bought 5 contracts of VXX Jun 19C at 1.42
Will let this trade play out over the next 4-5 weeks. I will close out 3 contracts at 2.84.
The timing on this VXX trade may have been a tad early so I’ll be looking for a potential trade in a month further in the future.

Strategy II stocks of interest for this week: TSLA, SPX & Index ETFs.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

 

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words, if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally, please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Strategy III Weekly Results Week ending 5/6/16:
SPY: Profit + $426
TSLA: Profit + $360

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 9.01%; Premium Collected since opening trade on 1/4/16 = $3564

Sold 4 contracts of SPY 13 May 204.5P at 1.47—potential profit $588.
Place a trailing stop at 0.40 cents to assure this week’s target revenue is achieved.

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 50.44%; Premium Collected since opening trade on 9/28/15 = $9668

Sold 1 contracts of TSLA 13 May 212.5P at 5.20—potential profit $520.

Pre-Earnings Trade: So far our pre-earnings trades have worked out well for both Strategies I and III. The following have promise for Pre-Earning trades: THOR**, AVGO**, DG, VEEV**, FIVE**, DY and NVDA.

Pre-earnings trades can be a great supplement to the portfolio building portion of Strategy I. Depending on the stock and technical analysis they tend to be predictable and repeatable. For busy traders focusing on pre-earning opportunities can free one up from the necessity of constantly chasing stocks during other periods of the year. The process repeats four times a year and capturing a 5%-15% return four times a year can compound very nicely!

Potential Set Ups for this week: In yesterday’s Trader’s Report I state, “Looking forward to this week it appears that the Indexes may be ready to bounce up but will it simply be a relief rally or a strong rebound.” The Indexes attempted to rebound today with mixed result. While a relief rally would set up some downside trades, if strong volume strength comes into the market price on individual stocks may bounce more significantly. Right now stocks with earnings coming up within the next 3-6 weeks are in play and moving. Little is propelling stocks that have reported earlier.

Additionally, it seems that Monday and Fridays are turning into do nothing days with most movement taking place between Tuesday and Thursday. Many of the stocks reviewed this week are like the Indexes and have pulled back to support. Many have conflicts between their weekly charts and daily charts. Daily charts look like stocks are positioned for a bounce, while weekly charts look like any bounce may be set ups for downside trades. The list below contain several new stocks that look promising in either direction.

Upside: OLLI, BABA, FB, TZA, SQQQ and SPXU.

Downside: If the Indexes pullback from current resistance zone look for weak stocks or go to the inverse Index ETFs. Some weak stocks include: BIDU, AAPL and NFLX

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (270 resistance/140 support), ALK (reversion to mean trade), PYPL, LNKD, BABA, OLLI, NOAH, CRM, AMZN, FB, THO, TRU, TXRH and AOS. On 5/10 adding EXP.

Stocks identified by ** that are close to a potential entry point.

 


May 9, 2016

Good Day Traders,

IBD recently introduced a new tracking service called Swing Trader. I will be adding this tool to the other IBD tools I track for all Active Trend Traders. If a stock shows up there that looks promising I will add it to our list of candidates for trading. This will be another value added part of the Active Trend Trading System. As a result of today’s review THOR, TRU and TXRH are added to candidates for this week.

Market Update: Weak is the best way to describe each of the three Tracking Indexes today. Price action gapped up marginally ran up hit the 8 day EMA or the 8/20 day EMA’s and retreated during the last hour of the day. The daily and weekly charts are still showing mixed signals with the daily looking ready for at least a bounce and the weekly looking ready to continue downward. It appears that this will be a fairly quiet week for economic reports and earnings. The EIA Petroleum Status, Import/Export Prices, Business Inventories and Consumer Sentiment have the biggest potential for moving the markets. The other catalyst may be the plethora of Fed talking heads that will be speaking on Thursday and Friday. While most of what they have to say will be simply noise, the Indexes are showing a tendency to move with the emotions.

The NDX remains the weakest of the Tracking Indexes. Price action has fallen below all the moving averages and the 20 day is close to crossing below the 50 day. Ideally a bit more of a bounce into stronger resistance would be ideal for setting up a downside trade. I’ll be watching for this with alerts in place around the 4390 level. Puts on QQQ or a long position in SQQQ would may trigger that level. Unlike the SPX and RUT, all the moving averages on the NDX are now acting as resistance.

Both the SPX and RUT are stuck between resistance at the 50 day EMA and resistance at the 8/20 day EMA’s. At this point the question is will the current moving average squeezes on both Indexes fire short or long? If the NDX provides enough drag the break may be down on all Indexes. Today’s bounce was not a buyable bounce due to being so close to resistance.

SPX 5-9

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


Managing Existing Trades: Positions open for all 3 strategies.

Strategy I Portfolio Building: Opened a pre-earnings position in FIVE on 5-9.
Bought 340 shares of FIVE at 40.18
T1 = 5% -10% to close 170 shares
T2 = Attempt to hold remaining shares up to earnings and then close
Stop Loss = 38.57
Earnings: 6/1 AMC

Strategy II Income Generation: Speculative Trade going on VXX

Opened speculative trade with the expectation that volatility will pick up between now and June. Bought 5 contracts of VXX Jun 19C at 1.42
Will let this trade play out over the next 4-5 weeks. I will close out 3 contracts at 2.84.

Strategy II stocks of interest for this week: TSLA, SPX & Index ETFs.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

 

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words, if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally, please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Strategy III Weekly Results Week ending 5/6/16:
SPY: Profit + $426
TSLA: Profit + $360

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 9.01%; Premium Collected since opening trade on 1/4/16 = $3564

Sold 4 contracts of SPY 13 May 204.5P at 1.47—potential profit $588.

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 50.44%; Premium Collected since opening trade on 9/28/15 = $9668
Sold 1 contracts of TSLA 13 May 212.5P at 5.20—potential profit $520.


Pre-Earnings Trade: So far our pre-earnings trades have worked out well for both Strategies I and III. The following have promise for Pre-Earning trades: THOR**, AVGO**, DG, VEEV**, FIVE**, DY and NVDA.

Pre-earnings trades can be a great supplement to the portfolio building portion of Strategy I. Depending on the stock and technical analysis they tend to be predictable and repeatable. For busy traders focusing on pre-earning opportunities can free one up from the necessity of constantly chasing stocks during other periods of the year. The process repeats four times a year and capturing a 5%-15% return four times a year can compound very nicely!

Potential Set Ups for this week: In yesterday’s Trader’s Report I state, “Looking forward to this week it appears that the Indexes may be ready to bounce up but will it simply be a relief rally or a strong rebound.” The Indexes attempted to rebound today with mixed result. While a relief rally would set up some downside trades, if strong volume strength comes into the market price on individual stocks may bounce more significantly. Right now stocks with earnings coming up within the next 3-6 weeks are in play and moving. Little is propelling stocks that have reported earlier.

Additionally, it seems that Monday and Fridays are turning into do nothing days with most movement taking place between Tuesday and Thursday. Many of the stocks reviewed this week are like the Indexes and have pulled back to support. Many have conflicts between their weekly charts and daily charts. Daily charts look like stocks are positioned for a bounce, while weekly charts look like any bounce may be set ups for downside trades. The list below contain several new stocks that look promising in either direction.

Upside: OLLI, BABA, FB, TZA, SQQQ and SPXU.

Downside: If the Indexes pullback from current resistance zone look for weak stocks or go to the inverse Index ETFs. Some weak stocks include: BIDU, AAPL and NFLX

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (270 resistance/140 support), ALK (reversion to mean trade), PYPL, LNKD, BABA, OLLI, NOAH, CRM, AMZN, FB and AOS. On 5/9 adding THOR, TRU and TXRH.

Stocks identified by ** that are close to a potential entry point.

Early Warning Alerts for Leveraged Index ETFs: Waiting for Second Chance Entry trigger and Alert reset. As stated previously, if there are downside signals on the indexes that trigger a trade in one of the Inverse Index ETFs a courtesy alert will be sent out to both Early Warning and Premium Members.


May 2, 2016

Good Day Traders,

Market Update: I’m waiting for a pull-up to resistance for an opportunity to take a downside trade in either the Index ETF’s or Inverse Leveraged ETFs. Until price action shows differently I am sticking with the thought that current market action is similar to that back in the first 5 months of 2008 just before the big plunge. If price action proves this theory wrong that’s fine and I will adjust. Today’s action to the upside was good it happened on lower volume. At this stage of the rally since February low volume pull ups are suspect. Here are the zones of resistance where I will look for turn around on each of the three Tracking Indexes.

SPX: Resistance between current level and 2100
NDX: Resistance zone between 4400 and 4438
RUT: Strong resistance between current level and 1156

I will set alerts below the highs of these resistance zones on each Index and then plan to take action if the alerts are triggered.

Rather than the SPX chart today I’m showing the SPY daily chart. Note there is a flag line formed connecting the high from two weeks ago with the failed rally attempt last week. If price push up to this level a downside trade would be triggered if price started to fall. We may also see price push up to the high of 210.92 and stall. The question we must ask ourselves is, if we let price action reaching the downtrend flag line trigger a downside trade are we will to take the heat of price retesting up to the higher level? The answer to this may be yes because the move back to 210.92 is less than 4% if we take a trade at 219.18. This is where I will go to the intraday hourly charts if the 219.18 is hit to see if price action is showing weakness there. If it is taking the trade would be acceptable.

SPY 5-2

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


Managing Existing Trades: Positions open for all 3 strategies.

Strategy I Portfolio Building: Pre-earnings trade on SFM currently. Earnings on each are the last week in April. Several other stocks are setting up well for pre-earnings trades. We shall see what takes place with a weakening market.

Bought 240 shares of SFM at 27.60
T1 = 5% -10% to close 120 shares—Price action is respecting a downtrend resistance line if price action retest around 28.75 taking off ½ the position would be appropriate.
T2 = Attempt to hold remaining shares up to earnings and then close
Stop Loss = 26.49

Strategy II Income Generation:

Opened speculative trade with the expectation that volatility will pick up between now and June. Bought 5 contracts of VXX Jun 19C at 1.42
Will let this trade play out over the next 4-5 weeks. I will close out 3 contracts at 2.84.

Strategy II stocks of interest for this week: TSLA, NFLX, FB & Index ETFs.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Strategy III Weekly Results Week ending 4/29/16:
SPY: Profit + $264
TSLA: Loss -$95.00

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 9.7%; Premium Collected since opening trade on 1/4/16 = $3490

Sold 4 contracts of SPY 6May 210C at 1.14—potential profit $456.

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 47.37%; Premium Collected since opening trade on 9/28/15 = $9308

Will wait to sell the Call & Put positions the day of earnings when Implied Volatility is high. In the past IV on TSLA tends to top out around 200%. This will allow us to sell OTM positions with a great potential of expiring worthless. There may also be an opportunity to double dip this week. Earnings on 5/4 AMC.

Pre-Earnings Trade: So far our pre-earnings trades have worked out well. The refreshed list for this week includes OLED**, LGIH**, STOR, SFM, NVDA, BUFF, KORS, TSLA, ANET, DG and INCY**. ** designates stocks with attractive charts.

Pre-earnings trades can be a great supplement to the portfolio building portion of Strategy I. Depending on the stock and technical analysis they tend to be predictable and repeatable. For busy traders focusing on pre-earning opportunities can free one up from the necessity of constantly chasing stocks during other periods of the year. The process repeats four times a year and capturing a 5%-15% return four times a year can compound very nicely!

Potential Set Ups for this week: Many of the stocks reviewed this week are like the Indexes and pulling back from resistance. I’m not in a hurry to go long and want to see healthy pullbacks on the weekly chart. The list below contain several new stocks that look promising in either direction.

Upside: FB, SONC, TZA, SQQQ and SPXU.

Downside: If the Indexes pullback from current resistance zone look for weak stocks or go to the inverse Index ETFs. Some weak stocks include: AVGO, AAPL and NFLX

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (270 resistance/140 support), CTXS, TSLA, XRS, BIDU, OLLI, OLED, LGIH and INCY

Stocks identified by ** that are close to a potential entry point.

Early Warning Alerts for Leveraged Index ETFs: Waiting for Second Chance Entry trigger and Alert reset. As stated previously if there are downside signals on the indexes present that trigger a trade in one of the Inverse Index ETFs a courtesy alert will be sent out to both Early Warning and Premium Members.


April 28, 2016

Good Day Traders,

Market Update: Short term we may be seeing the Indexes moving into a healthy pullback to around the 38.2% Fib retracement level of the move up from mid-February to recent highs. We talked about how each of the Indexes were extended from their 8 week EMA and that moving back to this level would not be a surprise. Facebook’s great earning pop may have provided some upward momentum but it waned by the afternoon. The weight of negative economic news and the BOJ holding and not loosening money policy did the trick to send markets down. Since topping is a process, does current price action qualify as a kink in the recent fast upturn since February? Potentially. Note the past price action on the S&P from October through December 2015. Note how prices hit a high then consolidated in a downward sloping channel that was over 4% in range. The final break came at the beginning of 2016. If this symmetry repeats itself we could see price stay below last week’s high and start working lower. I’ve transposed this consolidation channel from last year on top of our current chart. Interesting to note that if selling accelerates the 38.2% retracement coincides with the downtrend channel on May 19th but could be reached much quicker.

The chart of the SPX is weak. While there may be a bounce tomorrow due to great AMZN and LNKD earnings will it be enough to reverse what looks like the beginning of a leg down. Additionally the negative divergence on both the TSI & Momentum turned out to be predictive and the rally attempt after last week’s high has now failed. The breakout above the long term trend channel has also failed. The plan at this point is to look for downside setups at the 8 day EMA and wait for reversal candles at strong support level for an upside trade. Right now support is at 2074 and resistance is at 2087.

SPX 4-28

The NDX is now heading towards at least a 38.2% retracement of its recent uptrend. Today’s price action ended below all the major moving averages. Yesterday we highlighted that there was a negative cross on the 8 & 20 day EMA’s the NDX may lead the other Indexes lower after a potential bounce after AMZN earnings. Use the 100 day Moving Average at 4401 as a line of demarcation for downside trades. There is support zone between the 4313 and 4232 levels. The NDX is the weakest of the three Tracking Indexes.

RUT holding up better than the other two Indexes but still caught in a longer term downtrend.

For each of the Indexes the price action over the past week is the first major selling we’ve seen since February. This is the first trial to the downside, so our clues will come on the rebounds as to when to enter downside trades. Opportunity will present itself very soon.

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

Managing Existing Trades: Positions open for all 3 strategies.

Strategy I Portfolio Building: Pre-earnings trade on SFM & RGR. Earnings on each are the first week in May.

Bought 180 shares of PYPL at 38.09
T1 = 5% -10% to close 100 shares–HIT
T2 = Attempt to hold remaining shares up to earnings and then close
Stop Loss = 36.56

Sold ½ of the position at 39.98 for profit over 4.96% or $170.10
Sold ½ of the position at 39.96 for a profit of $168.30
Total Profit = $338.40

 

Bought 240 shares of SFM at 27.60
T1 = 5% -10% to close 120 shares
T2 = Attempt to hold remaining shares up to earnings and then close
Stop Loss = 26.49
Bought 100 shares of RGR at 65.51
T1 = 5% -10% to close 50 shares
T2 = Attempt to hold remaining shares up to earnings and then close
Stop Loss = 62.88
Earnings on 5/2 AMC

 

Strategy II Income Generation: Open long PYPL Apr5 41C & FB Put Credit Spread
Strategy I Weekly Results Week ending 4/22/16:
PYPL: Profit + $180

Opened pre-earnings trade on PYPL. Bought 5 contracts of Apr5 41C at 0.60
Will close 3 contracts at 1.20 (100%) and hold the remainder up until earnings on 4/27 AMC
Price and Implied Volatility helped this trade!
Closed 3 contracts at 1.20 for a profit of $180.
Closed remaining 2 contracts day of earnings for a profit of $40
Total Profit = $220

Opened speculative trade with the expectation that volatility will pick up between now and June. Bought 5 contracts of VXX Jun 19C at 1.42
Will let this trade play out over the next 4-5 weeks. I will close out 3 contracts at 2.84.

Strategy II stocks of interest for this week: TSLA, SPX & Index ETFs.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

 

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Strategy II Weekly Results Week ending 4/22/16:
SPY: Profit + $284
TSLA: Profit + $192.00

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 5.5%; Premium Collected since opening trade on 1/4/16 = $2870

Sold 4 contracts of SPY 29Apr 207.5P at 1.16 —potential profit $464. Will close on 4/27 if price hits 0.50 prior to Fed reporting out.
Closed at 0.50, Profit $264

On 4/28 sold 4 contracts of SPY 5May 210C at 1.14—potential profit $456.

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 50.48%; Premium Collected since opening trade on 9/28/15 = $9193

Sold 1 contract of TSLA 29Apr 250P at 4.05 potential profit $405 will close when contract is between 0.50 & 1.00

Members have asked how I’ll handle earnings next week on TSLA. I will wait until the day of earnings because the Implied Volatility usually goes up to between 150-200%. I will then sell an OTM Put and Call. The day after earnings the Implied Volatility will crunch down to normal and premiums will melt away quickly. An alert will be sent out to highlight the potential trade.

Several members have asked about this strategy and a more detailed explanation is available at: http://activetrendtrading.com/wealth-and-income-strategy/

Pre-Earnings Trade: Some stocks will be setting up for the Q1 pre-earnings runs. In an up trending market many stocks will provide upside trades with expected returns between 5% – 20%. Here are some potential stocks that may provide pre-earning moves: TREE, SFM, STMP, RGR**, NVDA, STOR, BUFF, TSLA, SEDG, & MAA.

RGR looks very promising if a solid entry presents itself.

Pre-earnings trades can be a great supplement to the portfolio building portion of Strategy I. Depending on the stock and technical analysis they tend to be predictable and repeatable. For busy traders focusing on pre-earning opportunities can free one up from the necessity of constantly chasing stocks during other periods of the year. The process repeats four times a year and capturing a 5%-15% return four times a year can compound very nicely!

Potential Set Ups for this week: With the Fed now behind us and earnings well under way the market appears to be weakening or moving into a more significant pullback. At this point I’m not planning any trades for Friday, April 29th because I do not want to be long any additional positions. I will do my analysis this weekend to highlight stocks pulling back. We’re getting what we want, we just have to be patient. TSLA, NFLX and AMZN continue to provide trading opportunities for quick swing trades.

Upside: The stocks on the list are looking extended and ready for a healthy pullback that may be tradable depending on the strength of the Indexes. I will look for pre-earnings set ups and after earning potential trades.

Downside: If the Indexes pullback from current resistance zone look for weak stocks or go to the inverse Index ETFs. Some weak stocks include: AAPL, THO, STMP & CALM

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (270 resistance/140 support), PYPL, AMZN, NFLX, ELLI, OLLI (Speculative), AHS, XRS, FB, AYI, OLED, RGR, NKE, KORS, TREE, SIX, ELS, SBUX & LGIH.

Stocks identified by ** that are close to a potential entry point.

Early Warning Alerts for Leveraged Index ETFs: Waiting for Second Chance Entry trigger and Alert reset.

 


April 26, 2016

Good Day Traders,

Market Update: At the beginning of this week I identified 2 potential catalyst that could potentially move the Indexes this week. The first happened today with AAPL reporting earnings and fell almost 8%. This may set the tone for the Indexes while they wait for the Fed, FB and AMZN earnings. Both AMZN and FB dropped after hours in sympathy with AAPL. The earinigs on these three stocks formed one of the catalyst with the Fed report on Wednesday being the second. The first domino has fallen to the downside. AAPL suffered the first revenue drop in 13 years and profit dropped 23%. This is significant and may be the first knell calling for an overall market rollover. The big question for tomorrow is, will the gap down in AAPL be a shorting opportunity? Notice how the same downtrend that has prevailed since July of last year on the Indexes. Hmmm?

Tomorrow may be a very volatile day and any wrong statement by the Fed may be another blow to the current uptrend. Add to this FB tomorrow and AMZN earnings after market close tomorrow and Thursday respectively. The best way to trade around the Fed is to wait and see how the Indexes react after digesting the Fed announcement. This is what I will be doing. So no chart tonight because I expect now Index trades tomorrow.

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

Managing Existing Trades: Positions open for all 3 strategies.

Strategy I Portfolio Building: Pre-earnings trade on SFM & PYPL. Earnings on each are the last week in April. It appears that there will be several additional pre-earnings trades setting up including FB if we’re patient.

Bought 180 shares of PYPL at 38.09
T1 = 5% -10% to close 100 shares–HIT
T2 = Attempt to hold remaining shares up to earnings and then close–Close on 4/27 prior to market close.
Stop Loss = 36.56
Sold ½ of the position at 39.98 for profit over 4.96% or $170.10

Bought 240 shares of SFM at 27.60
T1 = 5% -10% to close 120 shares
T2 = Attempt to hold remaining shares up to earnings and then close
Stop Loss = 26.49

Strategy II Income Generation: Open long PYPL Apr5 41C & FB Put Credit Spread
Strategy I Weekly Results Week ending 4/22/16:
PYPL: Profit + $180
Opened pre-earnings trade on PYPL. Bought 5 contracts of Apr5 41C at 0.60
Will close 3 contracts at 1.20 (100%) and hold the remainder up until earnings on 4/27 AMC

Price and Implied Volatility helped this trade! Closed 3 contracts at 1.20 for a profit of $180.Will close remaining 2 contract tomorrow prior to close of market.

Opened speculative trade with the expectation that volatility will pick up between now and June. Bought 5 contracts of VXX Jun 19C at 1.42
Will let this trade play out over the next 4-5 weeks. I will close out 3 contracts at 2.84.

Strategy II stocks of interest for this week: TSLA, SPX & Index ETFs.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Strategy III Weekly Results Week ending 4/22/16:
SPY: Profit + $284
TSLA: Profit + $192.00

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 5.5%; Premium Collected since opening trade on 1/4/16 = $2870
Sold 4 contracts of SPY 29Apr 207.5P at 1.16—potential profit $464. Will close on 4/27 if price hits 0.50 prior to Fed reporting out.

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 50.48%; Premium Collected since opening trade on 9/28/15 = $9193
Sold 1 contract of TSLA 29Apr 250P at 4.05 potential profit $405 will close when contract is between 0.50 & 1.00

Several members have asked about this strategy and a more detailed explanation is available at: http://activetrendtrading.com/wealth-and-income-strategy/

Pre-Earnings Trade: Some stocks will be setting up for the Q1 pre-earnings runs. In an up trending market many stocks will provide upside trades with expected returns between 5% – 20%. Here are some potential stocks that may provide pre-earning moves: TREE, SFM, STMP, RGR**, NVDA, STOR, BUFF, TSLA, SEDG, & MAA.

RGR looks very promising if a solid entry presents itself.

Pre-earnings trades can be a great supplement to the portfolio building portion of Strategy I. Depending on the stock and technical analysis they tend to be predictable and repeatable. For busy traders focusing on pre-earning opportunities can free one up from the necessity of constantly chasing stocks during other periods of the year. The process repeats four times a year and capturing a 5%-15% return four times a year can compound very nicely!

Potential Set Ups for this week: I am willing to wait until after the Fed meeting on 4/27 before moving on any new trade unless the setup is phenomenal. I would like to see some solid pullbacks to support for stocks on the watch list. SONC has pulled back and may be at a buy point. TSLA, NFLX and AMZN continue to provide trading opportunities for quick swing trades.

Upside: The stocks on the list are looking extended and ready for a healthy pullback that may be tradable depending on the strength of the Indexes. I will look for pre-earnings set ups and after earning potential trades.

Downside: If the Indexes pullback from current resistance zone look for weak stocks or go to the inverse Index ETFs. Some weak stocks include: AAPL, THO, STMP, CALM & VRSK

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (270 resistance/140 support), PYPL, AMZN, NFLX, ELLI, OLLI (Speculative), AHS, XRS, FB, AYI, OLED, RGR, NKE, KORS, TREE, SIX, ELS, SBUX & LGIH.

Stocks identified by ** that are close to a potential entry point.

Early Warning Alerts for Leveraged Index ETFs: Waiting for Second Chance Entry trigger and Alert reset.


April 21, 2016

Good Day Traders,

Market Update: Tomorrow may be a rocky ride depending on how the Nasdaq and other Indexes react to GOOGL’s miss in earnings expectations. After hour several other tech stocks like FB and AMZN are down in sympathy with Alphabet’s plunge. (Seems so odd calling Google, Alphabet!)

The NDX continues to show hesitation and indecision on the daily charts. Today was the second stalling Doji candlestick pattern at a resistance zone. Price action has not gone into pullback mode yet, so there is no physical signal to go short or long at this point. If however prices gap down tomorrow and an Island Top will be in place that may define some downside opportunities. The Russell put in a Bearish Engulfing pattern covering the previous two day’s action. Both of these stocks recently pushed above a longer term downtrend line, if price fall here these breakouts may fail.

The S&P completed a Bearish Evening Star pattern and stopped just short of the 8 day EMA. At this point we do not know if this is the beginning of a major reversal or simply the start of a shallow pullback or deeper pullback. If the reaction to GOOGL’s earnings is strong then the SPX may continue to fall. There are two major clues in place that would tend to favor at least a pullback to the 38.2% retracement. The first is the negative divergence on the TSI & Momentum. Secondly the TSI has actually crossed to the downside. If price falls and closed below the 8 day EMA and the downtrend line the breakout potentially will have failed.

Tomorrow will be the critical juncture for this and the other Tracking Indexes based on a weekly chart. If price action falls a bit more the weekly chart will finish with a Shooting Star Bearish Reversal Signal. We will not know for certain until the end of the day and the weekly candle is complete.

SPX 4-21

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

Managing Existing Trades: Positions open for all 3 strategies.

Strategy I Portfolio Building: Pre-earnings trade on SFM, PYPL & XRS. Earnings on each are the last week in April. It appears that there will be several additional pre-earnings trades setting up including FB if we’re patient.

Bought 180 shares of PYPL at 38.09
T1 = 5% -10% to close 100 shares–HIT
T2 = Attempt to hold remaining shares up to earnings and then close
Stop Loss = 36.56
Sold ½ of the position at 39.98 for profit over 4.96% or $170.10

Bought 140 shares of XRS at 50.14
T1 = 5% -10% to close 70 shares–HIT
T2 = Attempt to hold remaining shares up to earnings and then close–HIT
Stop Loss = 48.13
Sold ½ of the position at 52.99 for profit over 5.6% or $199.5
Sold second half of position at 14% gain or $501.20
Total Gain = $700.70

Bought 240 shares of SFM at 27.60
T1 = 5% -10% to close 120 shares
T2 = Attempt to hold remaining shares up to earnings and then close
Stop Loss = 26.49

 

Strategy II Income Generation: Open long PYPL Apr5 41C & FB Put Credit Spread
Opened pre-earnings trade on PYPL. Bought 5 contracts of Apr5 41C at 0.60
Will close 3 contracts at 1.20 (100%) and hold the remainder up until earnings on 4/27 AMC
Price and Implied Volatility helped this trade! Closed 3 contracts at 1.20 for a profit of $180.

Opened speculative trade with the expectation that volatility will pick up between now and June. Bought 5 contracts of VXX Jun 19C at 1.42
Will let this trade play out over the next 4-5 weeks. I will close out 3 contracts at 2.84.
Strategy II stocks of interest for this week: TSLA, SPX & Index ETFs.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Week ending 4/15/16:
SPY: Profit + $56
TSLA: Profit + $916.50

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 3.34%; Premium Collected since opening trade on 1/4/16 = $2586

Sold 4 contracts of SPY Apr Week 4 207.5C at 1.49—potential profit $596

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 50.48%; Premium Collected since opening trade on 9/28/15 = $9193
Sold 1 contract of TSLA Apr Week 4 250P at 5.20 potential profit $505 will close when contract is between 0.50 & 1.00—Closed today at stop loss. Loss of $465

Several members have asked about this strategy and a more detailed explanation is available at: http://activetrendtrading.com/wealth-and-income-strategy/

Pre-Earnings Trade: Some stocks will be setting up for the Q1 pre-earnings runs. In an up trending market many stocks will provide upside trades with expected returns between 5% – 20%. Here are some potential stocks that may provide pre-earning moves: TREE, SIX, ELS, PYPL, XRX, SFM, STMP, RGR & FB.

XRS provide a good breakout from a trading range last week. Any test at support around $53.73 would be a trigger to add to this position. Additionally it appears that the 109.38 level is holding for FB so this may be a good level to re-enter a pre-earnings trade.

Potential Set Ups for this week: I would like to see some solid pullbacks to support for stocks on the watch list. SONC has pulled back and may be at a buy point. TSLA, NFLX and AMZN continue to provide trading opportunities for quick swing trades.

Upside: The stocks on the list are looking extended and ready for a healthy pullback that may be tradable depending on the strength of the Indexes. On good pullbacks or bounces from 8-20 day EMA’s SONC (inverted H&S pattern) and LGIH (retest around 25) look promising.

Downside: STMP, CALM & VRSK

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (270 resistance/140 support), PYPL, AMZN, NFLX, ELLI, OLLI (Speculative), AHS, XRS, FB, AYI, OLED, RGR, NKE, SEDG (between 22-23), TREE, SIX, ELS, SBUX & LGIH

Stocks identified by ** that are close to a potential entry point.

Early Warning Alerts for Leveraged Index ETFs: Waiting for Second Chance Entry trigger and Alert reset.


 

April 19, 2016

Good Day Traders,

Market Update: Today’s mixed market add to the clues that it’s time for a pullback. SPX pushed a bit higher into resistance. NDX closed with a Dark Cloud candlestick bearish reversal pattern. The Russell finished with a Doji just below strong resistance at 1150. None of the Indexes are ready for a downside trade or upside trade. No chart tonight because little has changed since last nights chart.

Right now individual stocks are providing the best swing trades as we’ve seen with our resent trades on PYPL and XRS. Would like to get a better entry signal to trade FB for a pre-earnings swing trade. TSLA may also start setting up for a pre-earnings trade. TSLA earnings are 5/4 AMC. Strong support around 241.

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

Managing Existing Trades: Positions open for all 3 strategies.

Strategy I Portfolio Building: Pre-earnings trade on PYPL & XRS. Earnings on each are the last week in April. It appears that there will be several additional pre-earnings trades setting up including FB if we’re patient.

Bought 180 shares of PYPL at 38.09 (Moved up close to the 5% target today so the pre-earnings run may be kicking in.)
T1 = 5% -10% to close 100 shares
T2 = Attempt to hold remaining shares up to earnings and then close
Stop Loss = 36.56
Sold ½ of the position at 39.98 for profit over 4.96% or $170.10

Bought 140 shares of XRS at 50.14
T1 = 5% -10% to close 70 shares
T2 = Attempt to hold remaining shares up to earnings and then close
Stop Loss = 48.13
Sold ½ of the position at 52.99 for profit over 5.6% or $199.5
Sold second half of position at 14% gain or $501.20
Total Gain = $700.70

Strategy II Income Generation: Open long PYPL Apr5 41C & FB Put Credit Spread

Opened pre-earnings trade on PYPL. Bought 5 contracts of Apr5 41C at 0.60
Will close 3 contracts at 1.20 (100%) and hold the remainder up until earnings on 4/27 AMC

Opened speculative trade with the expectation that volatility will pick up between now and June. Bought 5 contracts of VXX Jun 19C at 1.42
Will let this trade play out over the next 4-5 weeks. I will close out 3 contracts at 2.84.

Strategy II stocks of interest for this week: TSLA, SPX & Index ETFs.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Week ending 4/15/16:
SPY: Profit + $56
TSLA: Profit + $916.50

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 3.34%; Premium Collected since opening trade on 1/4/16 = $2586
Sold 4 contracts of SPY Apr Week 4 207.5C at 1.49—potential profit $596

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 50.48%; Premium Collected since opening trade on 9/28/15 = $9193
Sold 1 contract of TSLA Apr Week 4 250P at 5.20 potential profit $505 will close when contract is between 0.50 & 1.00—Closed today at stop loss. Loss of $465

Several members have asked about this strategy and a more detailed explanation is available at: http://activetrendtrading.com/wealth-and-income-strategy/

Pre-Earnings Trade: Some stocks will be setting up for the Q1 pre-earnings runs. In an up trending market many stocks will provide upside trades with expected returns between 5% – 20%. Here are some potential stocks that may provide pre-earning moves: TREE, SIX, ELS, PYPL, XRX, SFM, STMP, RGR & FB.

XRS provide a good breakout from a trading range last week. Any test at support around $53.73 would be a trigger to add to this position. Additionally it appears that the 109.38 level is holding for FB so this may be a good level to re-enter a pre-earnings trade.

Potential Set Ups for this week: I would like to see some solid pullbacks to support for stocks on the watch list. SONC has pulled back and may be at a buy point. TSLA, NFLX and AMZN continue to provide trading opportunities for quick swing trades.

Upside: The stocks on the list are looking extended and ready for a healthy pullback that may be tradable depending on the strength of the Indexes. On good pullbacks or bounces from 8-20 day EMA’s SONC (inverted H&S pattern) and LGIH (retest around 25) look promising.

Downside: STMP, CALM & VRSK

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (270 resistance/140 support), PYPL, AMZN, NFLX, ELLI, OLLI (Speculative), AHS, XRS, FB, AYI, OLED, RGR, NKE, SEDG (between 22-23), TREE, SIX, ELS, SBUX & LGIH

Stocks identified by ** that are close to a potential entry point.

Early Warning Alerts for Leveraged Index ETFs: Waiting for Second Chance Entry trigger and Alert reset.


 

April 18, 2016

Good Day Traders,

Market Update: Made it back from the mountains where the internet connection was a slow as an old telephone modem it just didn’t ding when I connected. We spent Sunday tucked away in a valley outside of Mariposa, California with longtime friends at their cabin. No mobile phone connection so no market update during the day. This is where conditional orders are very important. I can comfortably be in a remote place and know I’m still protected. This is what we’ll be discussing at this week’s Mid-Week Market Sanity Check training. Don’t miss it!

With this being tax day the remainder of the week will set the tone moving in to next week’s Fed Meeting. The odds are that there will be no rate hike so that should be positive for the market, but while this continuous climb might be defying logic, it is what it is! The SPX pushed up through the topside of the down trend channel that has been in place since July of last year. Prices are again getting extended from the 8, 20 and 50 day moving averages on the daily charts. On the daily chart the negative divergence for TSI and Momentum continues to be in play on the daily charts, but this doesn’t mean price cannot push higher into the current resistance zone from 2100 up to the 2134 level. At this point there are no reversal candles pattern present as a clue price are ready to pullback. Patience is key!

SPX 4-18

For both the NDX and RUT there is no pullback clues apparent other than the daily negative divergence. For each of the three Tracking Indexes we need a pullback to support to go long.

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

Managing Existing Trades: Positions open for all 3 strategies.

Strategy I Portfolio Building: Pre-earnings trade on PYPL & XRS. Earnings on each are the last week in April. It appears that there will be several additional pre-earnings trades setting up including FB if we’re patient.

Bought 180 shares of PYPL at 38.09 (Moved up close to the 5% target today so the pre-earnings run may be kicking in.)
T1 = 5% -10% to close 100 shares
T2 = Attempt to hold remaining shares up to earnings and then close
Stop Loss = 36.56

Bought 140 shares of XRS at 50.14
T1 = 5% -10% to close 70 shares
T2 = Attempt to hold remaining shares up to earnings and then close
Stop Loss = 48.13
Sold ½ of the position at 52.99 for profit over 5.6% or $199.5

Strategy II Income Generation: Open long PYPL Apr5 41C & FB Put Credit Spread

Opened pre-earnings trade on PYPL. Bought 5 contracts of Apr5 41C at 0.60
Will close 3 contracts at 1.20 (100%) and hold the remainder up until earnings on 4/27 AMC
Opened speculative trade with the expectation that volatility will pick up between now and June. Bought 5 contracts of VXX Jun 19C at 1.42
Will let this trade play out over the next 4-5 weeks. I will close out 3 contracts at 2.84.

Strategy II stocks of interest for this week: TSLA, SPX & Index ETFs.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Week ending 4/15/16:
SPY: Profit + $56
TSLA: Profit + $916.50

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 3.34%; Premium Collected since opening trade on 1/4/16 = $2586

Sold 4 contracts of SPY Apr Week 4 207.5C at 1.49—potential profit $596

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 50.48%; Premium Collected since opening trade on 9/28/15 = $9193

Sold 1 contract of TSLA Apr Week 4 250P at 5.20 potential profit $505 will close when contract is between 0.50 & 1.00

Several members have asked about this strategy and a more detailed explanation is available at: http://activetrendtrading.com/wealth-and-income-strategy/

Pre-Earnings Trade: Some stocks will be setting up for the Q1 pre-earnings runs. In an up trending market many stocks will provide upside trades with expected returns between 5% – 20%. Here are some potential stocks that may provide pre-earning moves: TREE, SIX, ELS, PYPL, XRX, SFM, STMP, RGR & FB.

XRS provide a good breakout from a trading range last week. Any test at support around $53.73 would be a trigger to add to this position. Additionally it appears that the 109.38 level is holding for FB so this may be a good level to re-enter a pre-earnings trade.

Potential Set Ups for this week: I would like to see some solid pullbacks to support for stocks on the watch list. SONC has pulled back and may be at a buy point. TSLA, NFLX and AMZN continue to provide trading opportunities for quick swing trades.

Upside: The stocks on the list are looking extended and ready for a healthy pullback that may be tradable depending on the strength of the Indexes. On good pullbacks or bounces from 8-20 day EMA’s SONC (inverted H&S pattern) and LGIH (retest around 25) look promising.

Downside: STMP, CALM & VRSK

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (270 resistance/140 support), PYPL, AMZN, NFLX, ELLI, OLLI (Speculative), AHS, XRS, FB, AYI, OLED, RGR, NKE, SEDG (between 22-23), TREE, SIX, ELS, SBUX & LGIH

Stocks identified by ** that are close to a potential entry point.

Early Warning Alerts for Leveraged Index ETFs: Waiting for Second Chance Entry trigger and Alert reset.

 


 

April 14, 2016

Good Day Traders,

Market Update: Does the new push higher look to have legs to challenge last year’s highs? Great question now we wait for the answer. Clearly the move up this week appears to be happening on lower momentum we know that both stocks and indexes can move considerably higher on momentum vapors. Additionally the Tracking Indexes are performing exactly how one would expect with tomorrow being monthly option expirations. At current price levels we don’t want to buy, but without solid reversal signals we don’t want to sell either. I checked and Monday is the IRS filing date so funds will continue to flow into IRA’s and 401k’s through Monday, but then what?

The SPX & RUT was up a smidgen and the NDX was down a smidgen today. All three finished with spinning top Doji’s a sign of indecision. The downtrend resistance line is in play with all three and may provide a clue if price action now drops below this level on the NDX and SPX and fails to breach the line for the RUT. A failure here would leave the longer term downtrend in place after prices on each Index tested and failed totally conquer the level of resistance. For the SPX and NDX prices have pushed up into the resistance zone that defined the top in the October-November timeframe last year. If tomorrow’s price action is again meek then this may lead to a bit of a sell off going into next week. For each of the Indexes there are clues that they are ready to sit down like the negative divergence on both the momentum oscillators. The missing clue is stronger negative price action. Until this clue shows up we must favor the upside bias. Right now I’m perfectly fine to wait until next week prior to trading any of the Indexes.

spx 4-14

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

Managing Existing Trades: Positions open for all 3 strategies.

Strategy I Portfolio Building: Pre-earnings trade on PYPL & XRS. Earnings on each are the last week in April. I would like to see PYPL find some upside momentum which and breakout of the current tight trading range. If it’s going to happen positive price action should be kicking in.

Bought 180 shares of PYPL at 38.09
T1 = 5% -10% to close 90 shares
T2 = Attempt to hold remaining shares up to earnings and then close
4% Stop Loss = 36.56, use a conditional order.

Bought 120 shares of FB at 113.55
T1 = 5% -10% to close 60 shares
T2 = Attempt to hold remaining shares up to earnings and then close
4% Stop Loss = 109.00 Stop hit by closing below 50 day Moving Average. Timed stop fired at 12:59 pm PDT. Loss 4.1% or $599.20 on 120 shares.

Bought 140 shares of XRS at 50.14
T1 = 5% -10% to close 70 shares: Price has found resistance at around 52.50-52.60 so I’ll look to close ½ the position if these levels are retested. Closed ½ position at 52.99 for a profit of $199.50

T2 = Attempt to hold remaining shares up to earnings and then close or close at resistance between 57.30-57.50
4% Stop Loss = 48.13 or with a weak market move up to a close below the 50 day EMA.

Strategy II Income Generation: Open long PYPL Apr5 41C & FB Put Credit Spread

Profit last week = $0.0

Opened pre-earnings trade on PYPL. Bought 5 contracts of Apr5 41C at 0.60
Will close 3 contracts at 1.20 (100%) and hold the remainder up until earnings on 4/27 AMC

Opened pre-earnings spread on FB. Sold the Apr15 113P and sold the Apr15 116P for a net credit of 1.68. Total at risk 1.32 x 3 contracts—This position must be closed 4-15 prior to market close!

Opened speculative trade on VXX. Bought 5 contracts of Jun16 19C at 1.42
Will close 3 contracts at 2.84 (100%) and will hold the last 2 contracts for a spike in volatility expected between now and June. With this being a speculative trade I’m willing to let it expire worthless.

Strategy II stocks of interest for this week: TSLA, SPX & Index ETFs.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Week ending 4/15/16:
SPY: Profit + $0.00
TSLA: Profit + $916.50

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 3.3%; Premium Collected since opening trade on 1/4/16 = $2530

Sold 4 contracts of SPY Apr16 207.5C at 0.77—potential profit $308

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 43.92%; Premium Collected since opening trade on 9/28/15 = $9193

Sold 1 contract of TSLA Apr16 260C at 5.20 potential profit $560 will close when contract is between 0.50 & 1.00—Closed position today at 0.97 thus meeting the weekly cash flow objectives.
Profit for week = $423

4/12: Sold 2 contracts of TSLA Apr16 245P at 3.55 potential profit $355 will close when contract is between 0.50 & 1.00—Closed 1 contract at 1.44 and the other today at 0.73.
Profit for week = $493.50
Total TSLA Profit for week = $916.50
and we have now paid for the underlying LEAPS options which are the foundation of this Strategy.

Several members have asked about this strategy and a more detailed explanation is available at: http://activetrendtrading.com/wealth-and-income-strategy/

I posted a video about how to choose the weekly options to short for this strategy. It can be viewed at: http://activetrendtrading.com/videos/

Additionally some of these trade may be selling weekly puts on up trending stocks. If you are interested in parallel trading this strategy register at this link: http://forms.aweber.com/form/99/1278533099.htm

 

Pre-Earnings Trade: Some stocks will be setting up for the Q1 pre-earnings runs. In an up trending market many stocks will provide upside trades with expected returns between 5% – 20%. Here are some potential stocks that may provide pre-earning moves: PYPL, XRS, NFLX, SFM, JUNO & FB.

The FB trade wasn’t working and stopped out on the first attempt. FB is still promising for a pre-earnings trades but needs to find a stronger level of support and flash a reversal signal. Positive Bullish Harami on FB today. If the current support hold the 5-10% pre-earnings trade may be back on.

Potential Set Ups for this week: I’m not in a hurry to jump in to any long trade this week because many stocks are still over bought. Most stocks on the list are showing signs of topping but not strong signs of heavy selling. A healthy pullback to the 38.2% retracement levels or other defined support levels would provide higher probability entry opportunities. I’ll be watching for uniform pullbacks to levels of support for potential bounces.

I still like trading TSLA, NFLX, AMZN and the Index leveraged and non-leveraged ETF’s for brief swing trades but I don’t want to hold these a for more than a couple of days.

Upside: The stocks on the list are looking extended and ready for a healthy pullback that may be tradable depending on the strength of the Indexes. On good pullbacks or bounces from 8-20 day EMA’s SONC (inverted H&S pattern) and LGIH (retest around 25) look promising.

Downside: STMP, CALM, RGR, NKE & VRSK

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (270 resistance/140 support), PYPL, AMZN, NFLX, BIDU, ELLI, OLLI (Speculative), AHS, XRS (Look to add on a pullback and bounce from 53.75), FB, AYI, OLED, CALM, SONC, RGR, NKE, SEDG (between 22-23), SBUX & LGIH

Stocks identified by ** that are close to a potential entry point.

Early Warning Alerts for Leveraged Index ETFs: Waiting for Second Chance Entry trigger and Alert reset.


 

April 12, 2016

Good Day Traders,

Remember, everyone is invited to this Wednesday’s training session which is part of the Active Trend Trading Premium Service. The topic for this week is “Knowing when to go for Homerun Trades”.

Join us at: https://attendee.gotowebinar.com/register/1270197987694757889

Market Update: The battle between buyers and sellers continues with the buyers coming out on to today. I’m looking for at least a mild bias towards the buyers through the end of the week when monthly options expire. This bias is based on past tendencies of expiration week ending to the upside. But then what? Friday also marks the 15th and with the funding of 2015 IRA’s and 401k’s coming to a close. Once this inflow of funds is complete will the market provide a healthier pullback? We shall see.

With the global and U.S. economic outlook showing signs of slowing growth to meet the definition of the “new normal” will the markets also be stuck with a cloudy outlook? There are many questions like this that are facing policy makers along with how to not scare a potentially teetering market in an election year! With what appears to be a dire forecast remember “Price is King” and currently price can’t make up its mind which way to go. This indecision is providing quick trading opportunities for traders who are quick orders.

The SPX bounced again from support at the 20 day EMA and pushed up to the highs of the last six days. There is stronger resistance at the 2072 level which is a target area for potential short trade using either puts or the inverse index ETF for the SPX. This level would be a logical place for sellers to reappear to drive prices down at least to the 20 day EMA. This would be a move of 1.2% from today’s highs. Are the Index ETFs worth trading now or would one be more prudent to wait until after expiration Friday? An argument can be made for either decision with those wanting to be more conservative waiting until Friday near the close to decide for potential moves next week.

Each of the Tracking Indexes regained the 8 day EMA as price found support and bounced higher. The NDX and RUT still has significant resistance to battle through to resume the uptrend started in early February. The daily TSI and Momentum on all 3 Indexes turned positive and are moving back up from the zero line. This provides some potential for a push higher, but this push may be short lived if the conflicting weekly TSI continues to rollover. Remember each is of the Indexes is in a downtrend channel that has last several months. This downtrend will remain in place until prices break through to the upside.

SPX 4-12

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

Managing Existing Trades: Positions open for all 3 strategies.

Strategy I Portfolio Building: Pre-earnings trade on PYPL & XRS. Earnings on each are the last week in April.

Bought 180 shares of PYPL at 38.09
T1 = 5% -10% to close 100 shares
T2 = Attempt to hold remaining shares up to earnings and then close
4% Stop Loss = 36.56, use a conditional order.

Bought 120 shares of FB at 113.55
T1 = 5% -10% to close 60 shares
T2 = Attempt to hold remaining shares up to earnings and then close
4% Stop Loss = 109.00 Stop hit by closing below 50 day Moving Average. Timed stop fired at 12:59 pm PDT. Loss 4.1% or $599.20 on 120 shares.

Bought 140 shares of XRS at 50.14
T1 = 5% -10% to close 70 shares: Price has found resistance at around 52.50-52.60 so I’ll look to close ½ the position if these levels are retested.
T2 = Attempt to hold remaining shares up to earnings and then close
4% Stop Loss = 48.13 or with a weak market move up to a close below the 50 day EMA.

Strategy II Income Generation: Open long PYPL Apr5 41C & FB Put Credit Spread

Profit last week = $0.0

Opened pre-earnings trade on PYPL. Bought 5 contracts of Apr5 41C at 0.60
Will close 3 contracts at 1.20 (100%) and hold the remainder up until earnings on 4/27 AMC

Opened pre-earnings spread on FB. Sold the Apr15 113P and sold the Apr15 116P for a net credit of 1.68. Total at risk 1.32 x 3 contracts.
Strategy II stocks of interest for this week: TSLA, SPX & Index ETFs.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Week ending 4/15/16:
SPY: Profit + $0.00
TSLA: Profit + $423

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 3.3%; Premium Collected since opening trade on 1/4/16 = $2530

No Short Positions—Waiting for Set Up

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 43.92%; Premium Collected since opening trade on 9/28/15 = $8280

Sold 1 contract of TSLA Apr16 260C at 5.20 potential profit $560 will close when contract is between 0.50 & 1.00—Closed position today at 0.97 thus meeting the weekly cash flow objectives.
Profit for week = $423

4/12: Sold 1 contract of TSLA Apr16 245P at 3.55 potential profit $355 will close when contract is between 0.50 & 1.00

Several members have asked about this strategy and a more detailed explanation is available at: http://activetrendtrading.com/wealth-and-income-strategy/

I posted a video about how to choose the weekly options to short for this strategy. It can be viewed at: http://activetrendtrading.com/videos/

Additionally some of these trade may be selling weekly puts on up trending stocks. If you are interested in parallel trading this strategy register at this link: http://forms.aweber.com/form/99/1278533099.htm

Pre-Earnings Trade: Some stocks will be setting up for the Q1 pre-earnings runs. In an up trending market many stocks will provide upside trades with expected returns between 5% – 20%. Here are some potential stocks that may provide pre-earning moves: PYPL, XRX, NFLX, SFM, JUNO & FB.

The FB trade wasn’t working and stopped out today. FB is still promising for a pre-earnings trades but needs to find a stronger level of support and flash a reversal signal. Positive Bullish Harami on FB today. If the current support hold the 5-10% pre-earnings trade may be back on.

Potential Set Ups for this week: I’m not in a hurry to jump in to any long trade this week because many stocks are still over bought. Most stocks on the list are showing signs of topping but not strong signs of heavy selling. A healthy pullback to the 38.2% retracement levels or other defined support levels would provide higher probability entry opportunities. I’ll be watching for uniform pullbacks to levels of support for potential bounces.

Upside: The stocks on the list are looking extended and ready for a healthy pullback that may be tradable depending on the strength of the Indexes. On good pullbacks or bounces from 8-20 day EMA’s SONC (inverted H&S pattern) and LGIH (retest around 25) look promising.

Downside: STMP, CALM, RGR, NKE & VRSK

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (270 resistance/140 support), PYPL, AMZN, NFLX, ELLI, OLLI (Speculative), AHS, XRS, FB, AYI, OLED, CALM, SONC, RGR, NKE, SEDG (between 22-23), SBUX & LGIH

Stocks identified by ** that are close to a potential entry point.

Early Warning Alerts for Leveraged Index ETFs: Waiting for Second Chance Entry trigger and Alert reset.

 


 

April 11, 2016

Good Day Traders,

Market Update: Quasi mixed signals on the Tracking Indexes today. Light bump up in daily momentum and strong move up in weekly momentum. Combined TSI moving down on the daily chart and rolling over on the weekly chart. As highlighted in the Trader’s Report this weekend prices could start moving in a lateral direction through mid-month and potentially the end of the month when the Fed meets.

The SPX daily chart is showing some interesting potentials if price continues to churn at this level. First, there is support at the 20 day EMA and the uptrend line connecting several daily lows over the past 12 days. Above this level there are two levels of resistance. First at today’s high that stopped close to the mid-section of last week’s candlestick. Secondly the longer term downtrend line that defines the wider downward moving price channel. At this point the SPX is not ready to short. But of course this ideal could be blown out of the water if things turn ugly and price gaps down from current levels below the short uptrend line mentioned above. If this does happen look for support at the confluence of the 200, 100 & 50 day moving averages. All of these moving averages will be close to the 23.6% Fib retracement from the low on 2/11 and the high on 4/1. If this is the bounce area then it would provide additional clues for stronger downside move because a lower daily low would be in place and the neckline of the potential head and shoulders pattern would then be sloping downward.

This week is monthly weekly expiration week. These weeks tend to have a positive bias so bouncing as described above may be in play through the end of the week. Expect quick moves both up and down. We will see is the price action mimics the last four days of last week. With prices at resistance look for short trades and long trades at strong support. Do not expect to hold these long positions for a significant bounce and they may be closed quickly.

SPX 4-11

Price action for each Index is starting to hammer over the 8 & 20 day EMAs. Price have not accelerated to the downside so until this happens look to trade small positions until a reversal trend has been confirmed.

NDX has a sold off today but stayed within the support/resistance zone previously identified. Watch the 1105-1108 levels for potential downside trades in the RUT ETF’s. For both of these indexes be aware that the 38.2% Fib retracement is at 4293.58 and 1051.8 respectively.

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

Managing Existing Trades: Positions open for all 3 strategies.

Strategy I Portfolio Building: Pre-earnings trade on PYPL & XRS. Earnings on each are the last week in April.

Bought 180 shares of PYPL at 38.09
T1 = 5% -10% to close 100 shares
T2 = Attempt to hold remaining shares up to earnings and then close
4% Stop Loss = 36.56, use a conditional order.

Bought 120 shares of FB at 113.55
T1 = 5% -10% to close 60 shares
T2 = Attempt to hold remaining shares up to earnings and then close
4% Stop Loss = 109.00 Stop hit by closing below 50 day Moving Average. Timed stop fired at 12:59 pm PDT. Loss 4.1% or $599.20 on 120 shares.

Bought 140 shares of XRS at 50.14
T1 = 5% -10% to close 70 shares: Price has found resistance at around 52.50-52.60 so I’ll look to close ½ the position if these levels are retested.
T2 = Attempt to hold remaining shares up to earnings and then close
4% Stop Loss = 48.13 or with a weak market move up to a close below the 50 day EMA.

Strategy II Income Generation: Open long PYPL Apr5 41C & FB Put Credit Spread

Profit last week = $0.0

Opened pre-earnings trade on PYPL. Bought 5 contracts of Apr5 41C at 0.60
Will close 3 contracts at 1.20 (100%) and hold the remainder up until earnings on 4/27 AMC

Opened pre-earnings spread on FB. Sold the Apr15 113P and sold the Apr15 116P for a net credit of 1.68. Total at risk 1.32 x 3 contracts.
Strategy II stocks of interest for this week: TSLA, SPX & Index ETFs.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

 

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Week ending 4/8/16:
SPY: Profit + $410
TSLA: Down -$371

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 3.3%; Premium Collected since opening trade on 1/4/16 = $2530

No Short Positions—Waiting for Set Up

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 43.92%; Premium Collected since opening trade on 9/28/15 = $8280
Sold 1 contract of TSLA Apr16 260C at 5.20 potential profit $560 will close when contract is between 0.50 & 1.00

Several members have asked about this strategy and a more detailed explanation is available at: http://activetrendtrading.com/wealth-and-income-strategy/

I posted a video about how to choose the weekly options to short for this strategy. It can be viewed at: http://activetrendtrading.com/videos/

Additionally some of these trade may be selling weekly puts on up trending stocks. If you are interested in parallel trading this strategy register at this link: http://forms.aweber.com/form/99/1278533099.htm

Pre-Earnings Trade: Some stocks will be setting up for the Q1 pre-earnings runs. In an up trending market many stocks will provide upside trades with expected returns between 5% – 20%. Here are some potential stocks that may provide pre-earning moves: PYPL, XRX, NFLX, SFM & FB.

The FB trade wasn’t working and stopped out today. FB is still promising for a pre-earnings trades but needs to find a stronger level of support and flash a reversal signal.

Potential Set Ups for this week: I’m not in a hurry to jump in to any long trade this week due to what appears to be more pullback in the Indexes. Most stocks on the list are showing signs of topping but not strong signs of heavy selling. So this could be a healthy pullback to the 38.2% retracement levels. I’ll be watching for uniform pullbacks to levels of support for potential bounces.

Upside: The stocks on the list are looking extended and ready for a healthy pullback that may be tradable depending on the strength of the Indexes. On good pullbacks or bounces from 8-20 day EMA’s SONC (inverted H&S pattern) and LGIH (retest around 25) look promising.

Downside: STMP, CALM, RGR, NKE & VRSK

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (270 resistance/140 support), PYPL, AMZN, NFLX, ELLI, OLLI (Speculative), AHS, XRS, FB, AYI, OLED, RGR, NKE, SEDG (between 22-23), SBUX & LGIH

Stocks identified by ** that are close to a potential entry point.

Early Warning Alerts for Leveraged Index ETFs: Waiting for Second Chance Entry trigger and Alert reset.

 


 

April 7, 2016

Good Day Traders,

Market Update: I liked what IBD’s Big Picture said about today’s market action. It said, “Stock Indexes Thursday gave back the previous session’s gains, leaving bulls with the unwelcome conviction that price gains are now more like loans than gifts. So today the Market took away we shall see if tomorrow it gives back! Each of the three Tracking Indexes are in the process of reverting to either the 8 day or 20 day EMAs. Will they provide support for a brief bounce? If the pattern of the past three days continues tomorrow will be an up day back to resistance. If prices stall prior to reaching resistance or drop out the bottom then a retracement to the stronger moving averages or the Fib Retracement levels is probable.

The 8 day EMA on the S&P has served as either support or resistance with the consistency of butter! On the daily chart several clues are worth noting. First the first two thirds of a Head & Shoulder on price action is now in place. Both Momentum and TSI is looking weak and moving downward. Price did find support at the 20 day EMA today but finished in the lower third of the daily range. The 8 day EMA sits at 2053.47 so I’ll be watching this tomorrow for a test and failure pattern for a potential downside trade. Other clues of note are the convergence of support formed by the 200 day moving average and 23.6% Fib Retracement level. If price reach this level it may serve and an upward spring board. But if this level is reached another important clue that calls for more downside will be in place. The swing low from 3/24 will be violated. Breaching this level would count as a lower swing low which would increase the probability that the downtrend in SPX will continue. It does appear that the path of least resistance is down in the intermediate term.

When indexes are showing weakness some stocks will swim upstream and fight the rollover. For capital conservation this would be the time to only buy partial positions like we’ve done the last few days with our long trades in FB, PYPL and XRS.

spx 4-7

The NDX held at the 8 day EMA and the RUT held the 20 day. If the overall market does start to fall again, look for the RUT to accelerate downward more quickly than the other two indexes. This will make TZA a potential buy.

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

Managing Existing Trades: Positions open for all 3 strategies.

Strategy I Portfolio Building: Pre-earnings trade on PYPL.

Bought 180 shares of PYPL at 38.09
T1 = 105 to close 100 shares
T2 = Attempt to hold remaining shares up to earnings and then close
Stop Loss = 36.56

Strategy II Income Generation: Open long PYPL Apr5 41C & FB Put Credit Spread

Profit last week = $450

Opened pre-earnings trade on PYPL. Bought 5 contracts of Apr5 41C at 0.60
Will close 3 contracts at 1.20 (100%) and hold the remainder up until earnings on 4/27 AMC

Opened pre-earnings spread on FB. Sold the Apr15 113P and sold the Apr15 116P for a net credit of 1.68. Total at risk 1.32 x 3 contracts.

Strategy II stocks of interest for this week: TSLA, SPX & Index ETFs.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Week ending 4/1/16:
SPY: Profit + $152
TSLA: Profit + $451

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 2.59%; Premium Collected since opening trade on 1/4/16 = $2502

Opened 2 contracts of SPY Apr2 205.5C taking in $1.66 in premium; potential profit $332
Closed position at 0.50 today for a profit of $116 per contract. Profit of $232

Opened 2 contracts of SPY Apr2 206.5C taking in $0.99 in premium; potential profit $198
Closed position at 0.10 today for a profit of $89 per contract. Profit of $178

Total SPY Profit for week = $410

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 36.78%; Premium Collected since opening trade on 9/28/15 = $7671

Opened 2 contracts of TSLA Apr2 250C taking in $3.65 in premium; potential profit $730
Stopped out today at 8.55 on both options: Loss of $980

Will wait for second trade this week to mitigate this weekly loss. Still on track for 100% gain before expiration of Long LEAPS.

 

Pre-Earnings Trade: Some stocks may be setting up now for the Q1 earnings. In an up trending market many stocks will provide upside trades with expected returns between 5% – 20%. Currently have 3 pre-earnings trades open. Will evaluate other candidates this weekend.

Potential Set Ups for this week: Be watching for pullbacks this week. They may be quick and volatile but bounces from the 8 or 20 day EMA would be appropriate entry action points. If a rebound fails to appear get out of the trade quickly on any weakness.

If you are unable to watch the markets through the day, then choose a couple of the stocks like TSLA, AMZN NFLX or the Index Leveraged ETF’s and watch these. Having too many stocks can cause loss of focus. I will be identifying specific focus zones as they appear on some of the stocks below so you can plan trades. This way regardless is an alert goes out or not you will have a handful of stocks/ETFs you will be ready to move on.

Upside: Several stocks are pulling back with the Indexes. Watch for support at 8, 20 or 50 day moving averages or use symmetry based on previous pullbacks to plan upside trades. Be patient and let the price action come to the symmetry levels.

Candidates include: OLED, TSLA (good candidate to go both ways), THO & LGIH

Downside: STMP & RGR (demoted today dropped the 50 day on huge volume)

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (240 resistance/140 support), FB (Pullback to about 110), PYPL, AMZN, NFLX, ELLI, OLLI (Speculative wait for earnings), AHS, OLED, RGR, NKE, SEDG (between 22-23), SBUX & LGIH

Stocks identified by ** that are close to a potential entry point.

Early Warning Alerts for Leveraged Index ETFs: Waiting for Second Chance Entry trigger and Alert reset.

 


 

April 5, 2016

Good Day Traders,

Market Update: Keep a keen eye to determine if the current pullback acts differently than the pullbacks we’ve seen since the bounce mid-February. Yesterday resistance held and prices today followed through to the downside. Both the NDX and RUT fell to the uptrend line in place and stopped. Each finished towards the bottom of their daily ranges. This is a sign of potential weakness. Today’s move was enough to turn over both Momentum and the TSI indicators. Since the uptrend support line is still intact for both a bounce back to resistance may be in play for tomorrow. If this is a short term top it should behave like other tops and the topping action will be a process and not an event.

The SPX on the other hand did break and close below both the 8 day EMA and the uptrend line shown on the daily chart below. A short term swing high is in place. The 8 day EMA should now act as resistance on any testing move to the upside. Price action came to rest just above a support level at 2042. I will be looking for any retest between today’s low and the high at 2075 as a potential opportunity for a downside trade. Take a look the chart of SPXU during Oct-Nov of last year. This is the type of pattern that could provide quick bounce in the inverse ETF of the S&P. We do not have to get into a trade now, just wait for the consolidation pattern to mature and then launch if a 4% decline in the SPX is in the offing. The weekly chart on SPXU looks promising. As I’ve mentioned in recent updates if we top with symmetry to the topping action from last October, then a pullback of about 4.5% could be expected.

spx 4-5

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

 

Managing Existing Trades: Positions open for all 3 strategies.

Strategy I Portfolio Building: Pre-earnings trade on PYPL.

Bought 180 shares of PYPL at 38.09
T1 = 105 to close 100 shares
T2 = Attempt to hold remaining shares up to earnings and then close
Stop Loss = 36.56

Strategy II Income Generation: Opened long contracts of PYPL Apr5 41C

Profit last week = $450

Opened pre-earnings trade on PYPL. Bought 5 contracts of Apr5 41C at 0.60
Will close 3 contracts at 1.20 (100%) and hold the remainder up until earnings on 4/27 AMC

Strategy II stocks of interest for this week: AMZN, TSLA, SBUX, NFLX, BIDU, SPX & Index ETFs.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Week ending 4/1/16:
SPY: Profit + $152
TSLA: Profit + $451

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 2.59%; Premium Collected since opening trade on 1/4/16 = $2502

Opened 2 contracts of SPY Apr2 205.5C taking in $1.66 in premium; potential profit $332
Closed position at 0.50 today for a profit of $116 per contract. Profit of $232

Opened 2 contracts of SPY Apr2 206.5C taking in $0.99 in premium; potential profit $198

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 36.78%; Premium Collected since opening trade on 9/28/15 = $7671

Opened 2 contracts of TSLA Apr2 250C taking in $3.65 in premium; potential profit $730
Stopped out today at 8.55 on both options: Loss of $980

Will wait for second trade this week to mitigate this weekly loss. Still on track for 100% gain before expiration of Long LEAPS.

 

Pre-Earnings Trade: Some stocks may be setting up now for the Q1 earnings. In an up trending market many stocks will provide upside trades with expected returns between 5% – 20%. Here are some potential stocks that may provide pre-earning moves: FB, PYPL, NFLX, & SFM. FB is added to the pre-earnings list. Watch for a pullback to around 110 for a buying opportunity. Additionally a similar option trade can be made in the Apr5 112 or 115C could be entered and allow Implied Volatility expand as earnings approach.

Potential Set Ups for this week: Be watching for pullbacks this week. They may be quick and volatile but bounces from the 8 or 20 day EMA would be appropriate entry action points. If a rebound fails to appear get out of the trade quickly on any weakness.

If you are unable to watch the markets through the day, then choose a couple of the stocks like TSLA, AMZN NFLX or the Index Leveraged ETF’s and watch these. Having too many stocks can cause loss of focus. I will be identifying specific focus zones as they appear on some of the stocks below so you can plan trades. This way regardless is an alert goes out or not you will have a handful of stocks/ETFs you will be ready to move on.

Upside: Several stocks are pulling back with the Indexes. Watch for support at 8, 20 or 50 day moving averages or use symmetry based on previous pullbacks to plan upside trades. Be patient and let the price action come to the symmetry levels.

Candidates include: OLED, TSLA (good candidate to go both ways), THO & LGIH

Downside: STMP & RGR (demoted today dropped the 50 day on huge volume)

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (240 resistance/140 support), FB (Pullback to about 110), PYPL, AMZN, NFLX, ELLI, OLLI (Speculative wait for earnings), AHS, OLED, RGR, NKE, SEDG (between 22-23), SBUX & LGIH

Stocks identified by ** that are close to a potential entry point.

Early Warning Alerts for Leveraged Index ETFs: Waiting for Second Chance Entry trigger and Alert reset.


 

April 4, 2016

Good Day Traders,

Market Update: Each of the three Tracking Indexes finished down today on below average volume. I don’t think we can make too much of the volume since most of the rise over the last couple of weeks has happened on below average volume. The bottom line on all three Indexes is that price action is a resistance with the S&P at the strongest resistance. While we could jump out and open downside position on the Indexes it would be prudent to wait and see if an attempted retest of the high takes place. We must respect how the Indexes have pulled back over since it rebounded around February 11th. To this point price action has respected the 8 day EMA so this is the current personality and we expect it to continue until it doesn’t. How will we know it may be failing? When price closes below both the 8 day EMA and the uptrend line shown on the S&P daily chart below. Each of the Indexes is putting in a similar pattern.

On the S&P the Head & Shoulder’s pattern shaping up on the TSI is looking like a failure pattern. When grouped with declining Momentum and price at stiff resistance a more significant pullback may be in order. This may work out as a process over several days up until mid-April when funding of 401Ks and IRA’s will conclude. If the current price action is pointing towards a downturn and action falls at the inverse angle to the ascent then a return to the bottom of the downtrend channel could take place by the week of June 16th at a level of 1773ish. This project could change if price action follows past action and drives sideways for several weeks. The last time price reached the top of the downtrend channel the fall off was not sudden, it took 8 weeks before the final break. At this point the price action has not repeated the price action of November 2015 and may not, but the clues are saying the path of least resistance at this point is at best sideways. Remember the price action from November 3rd of last year was stuck in a trading channel of 4.8% which provided several opportunities to trade both direction for the quick. A 4.8% retracement from Friday’s high would take price down to the 38.2% retracement level—very interesting! If volatility starts kicking up with wider daily swings this would add credence to a downside move.

SPX 4-4

NDX Bearish Harami reversal signal on daily chart. Bearish Engulfing reversal pattern on the RUT. Looking for bottoming pattern on Inverse ETF’s SQQQ and TZA.

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

Managing Existing Trades: Only Strategy III trades open.

Strategy I Portfolio Building: No Open Trades.

Strategy II Income Generation: Opened and closed a weekly Call Credit spread on the SPX on Thursday and closed out first thing Friday morning.

Profit last week = $450

Currently no Open Trades—if you trade options this is a good strategy to send up trial trades to see if the market’s direction may be changing. 1-5 contracts of one of the Index ETFs may provide less downside risk than long position in the underlying Index ETF. Trading options is not for everyone and I strongly encourage members to first become successful trading stocks and ETFs.

Strategy II stocks of interest for this week: AMZN, TSLA, SBUX, NFLX, BIDU,SPX & Index ETFs.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Week ending 4/1/16:
SPY: Profit + $152
TSLA: Profit + $451

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Down -1.5%; Premium Collected since opening trade on 1/4/16 = $2120

Opened 2 contracts of SPY Apr2 205.5C taking in $1.66 in premium; potential profit $332
Opened 2 contracts of SPY Apr2 206.5C taking in $0.99 in premium; potential profit $198

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 44.82%; Premium Collected since opening trade on 9/28/15 = $8651

Opened 2 contracts of TSLA Apr2 250C taking in $3.65 in premium; potential profit $730

** I am short one of these call options because I’m covered by only one long call LEAPS. I will look at closing the short position when I have cleared about $2 of the premium collected. At this point it appears that this may happen tomorrow if the afterhours TSLA quote matches the open. TSLA is currently down almost $10 afterhours.

 

Pre-Earnings Trade: Some stocks may be setting up now for the Q1 earnings. In an up trending market many stocks will provide upside trades with expected returns between 5% – 20%. Here are some potential stocks that may provide pre-earning moves: PYPL, NFLX, & SFM. One way to potentially trade PYPL prior to earnings is to pick up a PYPL Apr5 40C, 41C or 42C between 0.60 & 1.00. As earnings approach price of the options will increase as Implied Volatility increases. I would limit my buy to no more than 2-5 contracts thus the risk is limited to $200-$300.

Potential Set Ups for this week: Be watching for pullbacks this week. They may be quick and volatile but bounces from the 8 or 20 day EMA would be appropriate entry action points. If a rebound fails to appear get out of the trade quickly on any weakness.

If you are unable to watch the markets through the day, then choose a couple of the stocks like TSLA, AMZN NFLX or the Index Leveraged ETF’s and watch these. Having too many stocks can cause loss of focus. I will be identifying specific focus zones as they appear on some of the stocks below so you can plan trades. This way regardless is an alert goes out or not you will have a handful of stocks/ETFs you will be ready to move on.

Upside: Many stocks are showing signs of being over-bought. This does not mean we jump immediately to the short side it just means we look for orderly pullbacks to past support. One of the things I’ve been working on over the past several weeks is the concept of symmetry in both price moves and timing of price moves. This can be a measure of order with both stocks and the Indexes. We often neglect these characteristics and enter trades either too early or late. Paying attention to symmetry can help avoid these profit thieves. There are many reasons why we traders act this way, but waiting for pullbacks at least to the moving averages will aid in patience and persistence in waiting for sound entry action points.

Candidates include: OLED, TSLA (good candidate to go both ways), THO & LGIH

Downside: STMP & RGR (demoted today dropped the 50 day on huge volume)

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (240 resistance/140 support), PYPL, AMZN, NFLX, ELLI, OLLI (Speculative wait for earnings), AHS, OLED, RGR, NKE, SEDG (between 22-23), SBUX & LGIH

Stocks identified by ** that are close to a potential entry point.

Early Warning Alerts for Leveraged Index ETFs: Waiting for Second Chance Entry trigger and Alert reset.

 


March 31, 2016

Good Day Traders,

Market Update: Today’s Tracking Indexes were mixed with the S&P and NDX putting in a slight loss and the RUT a slight gain. With all the dovish comments by the Fed this week tomorrow’s Job’s report may serve as a directional catalyst for each of the indexes. A stronger than expected report may lead to a selloff and a weaker than expected number would promote a move higher. At the same time tomorrow starts a new quarter and fund managers may start realigning which could put some downward pressure. Lastly moving through the 15th of April additional cash will flow into retirement accounts which could also buoy the current uptrend. We shall see.

The SPX finished today with a spinning top in a resistance zone. There are two clear lines of both resistance and support that if broken tomorrow may provide a clue to short term direction. Yesterday’s Shooting Star like candle provides the initial start of resistance at the 2072 level followed on by another level of resistance provided by the downtrend resistance line connecting previous highs. Tomorrow this line will be at 2078. On the support side today’s low provides the first level of support and if breached would increase the probability of a retesting the 8 day EMA or the uptrend support line shown on the chart below.

From a bigger picture perspective note that price action is still contained within the longer term downtrend channel. Current prices are very close to the upper boundary of this channel. Additionally both Momentum and TSI is either falling or showing negative divergence. Price can push higher even when Momentum and TSI are falling, but these actions happening at such a strong level of resistance provides solid clues that the uptrend may be waning and that potential downside trades should be considered.

SPX 3-31

 

The Nasdaq 100 acted much like the S&P today. Shooting Star yesterday followed by a spinning top at resistance today. A small support gap begins at today’s low of 4478. If prices selloff tomorrow look for support at either the 8 day EMA or the uptrend support line.

The Russell was slightly up but showing similar characteristics to the other Indexes. Resistance zone begins at today’s high. A support zone is in place between the 1100 and 1108 levels. If these are broken look for a retracement to the 8 day EMA or uptrend support line.

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

Managing Existing Trades: Strategies II & III Open Trades.

Strategy I Portfolio Building: No Open Trades.

Strategy II Income Generation: Opened SPX Bear Call Spread 3-31 to close tomorrow. Weekly options on the SPX became available just recently and they provide premium rich weekly options with expiration on either Wednesday or Friday. These are European Style option so there is no early assignment and they cash settle.

Sold a single Apr1 2050×2060 Call Spread for $7.60
Buyback position at end of day Friday April 1st or for $3.80
Profit/Loss Ratio = 3.16

Strategy II stocks of interest for this week: AMZN, TSLA, PYPL, SBUX, NFLX & BIDU.

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Week Ending 3-24 Premium Collected:
SPY: Profit $587.00
TSLA: Profit $283

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Down -0.05%; Premium Collected since opening trade on 1/4/16 = $1968

Opened 2 contracts SPY Apr1 202 for a 2.04 Credit–$408 potential Profit
Opened 2 contracts SPY Apr1 204C for a 0.94 Credit–$188 potential Profit
Opened 2 contracts SPY Apr1 200P for a 0.77 Credit–$154 potential Profit—Closed 3/30 at 0.03 for profit of $148
SPY Profit for the week: $148

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 43.7%; Premium Collected since opening trade on 9/28/15 = $8388

Opened 1 contracts TSLA Apr1 240C for a 3.30 Credit–$330 potential Profit
Opened 1 contracts TSLA Apr1 200P for a 2.20 Credit–$220 potential Profit—Closed 3/28 at 0.33
TSLA Profit for the week: $188.00

Pre-Earnings Trade: Watch PYPL (working off of Friday’s Hammer), AMZN and NFLX for pre-earning runs.

Potential Set Ups for this week: Thus far this has been an interesting week with many moving parts. Several of the stocks we’re watching are at overbought conditions and some pullbacks would potentially provide some entry opportunities. With tomorrow being Friday I’m not in a hurry to go long until these pullbacks start. Secondly, if the negative divergences starting to show up on the Tracking Indexes be ready for potential bounces in the inverse index ETFs.

If you are unable to watch the markets through the day, then choose a couple of the stocks like TSLA, AMZN NFLX or the Index Leveraged ETF’s and watch these. Having too many stocks can cause loss of focus. I will be identifying specific focus zones as they appear on some of the stocks below so you can plan trades. This way regardless is an alert goes out or not you will have a handful of stocks/ETFs you will be ready to move on.

Upside: NFLX (wait for retest around 102 or bounce from 8 day), ELLI & SFM.

Downside: INCY, XRS, NTES & CELG

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (240 resistance/140 support), AMZN (Pre-earnings), GOOGL, FB, NFLX (Pre-earnings), SBUX, BIDU, PAYC, NKE & SEDG (Range bound with support at 22).

Stocks identified by ** that are close to a potential entry point.

Early Warning Alerts for Leveraged Index ETFs: Waiting for Second Chance Entry trigger and Alert reset.

 


 

March 29, 2016

Good Day Traders,

Extra: Remember yesterday’s market update include a trade plan for TSLA. I’ll be working off that plan until it is modified.

Market Update: Well the Market was buying what Yellen was sellin’ today! Markets do not like uncertainty so Janet said that any rate hikes would be done gradually as needed with an eye towards the global economy as well as just the US economy. One of her big jobs through the rest of 2016 is probably to do what she can to assure the markets are stable because this is an election year. We shall see how that works out.

The big winner for the day was the Nasdaq 100 and its related stocks. It seemed like the NDX was primed for something positive and just after 9 a.m. PDT price action bolted back above the 8 day EMA and made a new high for the current uptrend. Today’s high is just a couple of points away from resistance formed by the low on 12/14 at the 4478 level. By moving solidly above the 61.8% retracement from last year’s high to this year’s low it does set up for a probable run to at least the 78.6% retracement at 4561. This level also coincides with the Fibonacci extension from the high on 2/1 to the low on 2/8 so this represents a strong level of resistance.

The Russell pushed closer to the 50% Fib Retracement from last year’s high to this year’s low. The 50% retracement sits at 1120. The downtrend resistance line connecting the highs on a weekly chart is coming into range for a retest. If the Fed has committed to only raising interest rates by 0.5% each raise going forward this may stoke the fires for the Russell. The current uptrend now has both higher highs and higher lows and until this pattern is broken look for long trades.

The S&P reacted well today but not with the same vigor as the other members of the Tracking Index. It provided a good bounce off the 8 day EMA but failed to take out the resent swing high at the 2056.6 level. If prices move higher tomorrow the downtrend resistance shown below will come into play as a potential stalling point. The upward trending wedge discussed last week has been breached but no downside break occurred. Keep this pattern in mind but look to trade SPX to the upside until additional downside pattern emerge. Note that the Momentum Oscillators are showing negative divergence as the S&P test near the recent swing high. This does not mean price will not push higher but simply that if momentum is waning the current up move may be showing the first signs of stalling.

SPX 3-29

On each of the Tracking Indexes a healthier pullback would provide better potential entry points but these short 3-4 day pullbacks to the 8 day seem to be what’s working right now. Remember the Market moving higher doesn’t have to make sense by any stretch of the imagination. The current environment is quick moves down followed by burst up. Tough to plan but it is what it is just above the 50% retracement level. Tomorrow the downtrend resistance line will be at 2076. Above this level there is strong resistance between 2080 and the last year’s high just above 2100. Additionally the Job’s Report comes out Friday which could be a market mover in either direction.

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

Managing Existing Trades: Only Strategy III trades open.

Strategy I Portfolio Building: No Open Trades.

Strategy II Income Generation: No Open Trades—if you trade options this is a good strategy to send up trial trades to see if the market’s direction may be changing. 1-5 contracts of one of the Index ETFs may provide less downside risk than long position in the underlying Index ETF. Trading options is not for everyone and I strongly encourage members to first become successful trading stocks and ETFs.

Strategy II stocks of interest for this week: AMZN, TSLA, PYPL, SBUX, NFLX & BIDU.

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Week Ending 3-24 Premium Collected:
SPY: Profit $587.00
TSLA: Profit $283

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Down -0.05%; Premium Collected since opening trade on 1/4/16 = $1968

Opened 2 contracts SPY Apr1 202 for a 2.04 Credit–$408 potential Profit
Opened 2 contracts SPY Apr1 204C for a 0.94 Credit–$188 potential Profit
Opened 2 contracts SPY Apr1 200P for a 0.77 Credit–$154 potential Profit

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 43.7%; Premium Collected since opening trade on 9/28/15 = $8388

Opened 1 contracts TSLA Apr1 240C for a 3.30 Credit–$330 potential Profit
Opened 1 contracts TSLA Apr1 200P for a 2.20 Credit–$220 potential ProfitClosed 3/28 at 0.33
TSLA Profit for the week: $188.00

 

Pre-Earnings Trade: Watch PYPL (working off of Friday’s Hammer), AMZN and NFLX for pre-earning runs.

Potential Set Ups for this week: After a fast move up by the indexes since 2/11 it appeared like a rest or pullback would take place. With today’s action it doesn’t appear to be lasting long. We may be seeing end of month and end of quarter action as Money Manager’s add their “window dressing”. This may last through Thursday and then pullbacks start up again in April.

If you are unable to watch the markets through the day, then choose a couple of the stocks like TSLA, AMZN NFLX or the Index Leveraged ETF’s and watch these. Having too many stocks can cause loss of focus. I will be identifying specific focus zones as they appear on some of the stocks below so you can plan trades. This way regardless is an alert goes out or not you will have a handful of stocks/ETFs you will be ready to move on.

Upside: NFLX (wait for retest around 102 or bounce from 8 day), SFM & SBUX

Downside: INCY, XRS, NTES & CELG

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (240 resistance/140 support), AMZN (Pre-earnings), GOOGL, FB, NFLX (Pre-earnings), SBUX, BIDU, PAYC, NKE & SEDG (Range bound with support at 22).

Stocks identified by ** that are close to a potential entry point.

Early Warning Alerts for Leveraged Index ETFs: Waiting for Second Chance Entry trigger and Alert reset.

 

 


 

March 28, 2016

Good Day Traders,

Extra: Tonight I’ll put together a trade plan on TSLA to use for both buying the stock and options. This will provide all Active Trend Trading members identified zones for various types of trades. This way you will be ready to trade TSLA on your own.

Market Update: The Tracking Indexes were mixed today with the Nasdaq 100 down and both the S&P and Russell down a bit. After each of the Indexes flashing reversal signals on the weekly charts last week today’s mild action didn’t provide a great clue as to direction for the rest of the week. The RUT looks to have the highest probability for a strong pull back to between the 1060 and 1040 levels. Today’s RUT price action remained below the 100, 200 and 8 day moving averages.

The NDX held above the 8 day EMA wedged up against the 200 day moving average. Price action does not look primed to let go to the downside so we may see more horizontal consolidation until the current short term uptrend is broken.

The SPX finished with a spinning top Doji just above the 8 day EMA and looks similar to the NDX regarding a hard drop. There is short term support at 2022 and resistance at the 2056 level. If the current move off the high shows symmetry with the move off the high in November of 2015 prices went sideways for several days until it dropped hard. The total downturn in November lasted 10 trading days. A similar pullback would send prices down to the 1963 level which is at the 38.2% Fibonacci retracement. An ideal scenario would be for prices to fall to the 38.2% retracement zone bounce and then start showing some negative divergence in the momentum oscillators. Any retest between current levels and the 2056 level would provide an opportunity for a short term downside trade. A fast drop to the 38.2% retracement would provide a long side opportunity.

SPX 3-28

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

Managing Existing Trades: Only Strategy III trades open.

Strategy I Portfolio Building: No Open Trades.

Strategy II Income Generation: No Open Trades—if you trade options this is a good strategy to send up trial trades to see if the market’s direction may be changing. 1-5 contracts of one of the Index ETFs may provide less downside risk than long position in the underlying Index ETF. Trading options is not for everyone and I strongly encourage members to first become successful trading stocks and ETFs.

Strategy II stocks of interest for this week: AMZN, TSLA, PYPL, SBUX, NFLX & BIDU.

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Week Ending 3-24 Premium Collected:
SPY: Profit $587.00
TSLA: Profit $283

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Down -0.05%; Premium Collected since opening trade on 1/4/16 = $1968

Opened 2 contracts SPY Apr1 202 for a 2.04 Credit–$408 potential Profit
Opened 2 contracts SPY Apr1 204C for a 0.94 Credit–$188 potential Profit
Opened 2 contracts SPY Apr1 200P for a 0.77 Credit–$154 potential Profit

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 43.7%; Premium Collected since opening trade on 9/28/15 = $8388

Opened 1 contracts TSLA Apr1 240C for a 3.30 Credit–$330 potential Profit
Opened 1 contracts TSLA Apr1 200P for a 2.20 Credit–$220 potential ProfitClosed 3/28 at 0.33
TSLA Profit for the week: $188.00

 

Pre-Earnings Trade: Watch PYPL, AMZN and NFLX for pre-earning runs.

Potential Set Ups for this week: After a fast move up by the indexes since 2/11 it appears a rest or pullback is taking place. On this first pause we should treat all pullbacks as a buy opportunity on the rebound until the Indexes show us a complete change in personality. The key task for traders is to hone a list of potential candidates to a manageable number. Look for orderly pullbacks on below average or shrinking volume.

If you are unable to watch the markets through the day, then choose a couple of the stocks like TSLA, AMZN NFLX or the Index Leveraged ETF’s and watch these. Having too many stocks can cause loss of focus. I will be identifying specific focus zones as they appear on some of the stocks below so you can plan trades. This way regardless is an alert goes out or not you will have a handful of stocks/ETFs you will be ready to move on.

Upside: NFLX, SFM & SBUX

Downside: INCY, XRS, NTES & CELG

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (240 resistance/140 support), AMZN (Pre-earnings), GOOGL, FB, NFLX (Pre-earnings), SBUX, BIDU, PAYC, NKE & SEDG (Range bound with support at 22).

Stocks identified by ** that are close to a potential entry point.

Early Warning Alerts for Leveraged Index ETFs: Waiting for Second Chance Entry trigger and Alert reset.

TSLA Trading Plan: TSLA has been on a tear since bottoming just above $140 early in February. What makes TSLA an attractive trading candidate is price level, daily ATR and monthly ATR. ATR stands for Average True Range over a given timeframe such as 14-21 days or 14 weeks. In the case of TSLA the 21 day ATR is 9.72 and the 14 week ATR comes in just over 21. So what a trader can expect is price action on a daily or weekly basis to approximately meeting these ATR’s. Our objective is to develop a plan where traders can carve out the middle of these moves trading either the stock or options.

I will evaluate three timeframes to determine levels of support and resistance for TSLA. Then assess which direction for potential trades. On the daily chart shown below, TSLA hit resistance at 240 and pulled back for three days last week. Based on this pullback and bounce resistance is identified between today’s high at the top moving average envelope and the 240 level. Any stalling in this zone would be a good place to enter a downside trade if the 1-hour intraday chart is overbought. A second short trigger would be an open above today’s candlestick body and a move below the body’s low at the 231.60 level. A trade down to either the 23.6% retracement or 214.87 level would be expected short term. What would I think about trading? TSLA could be shorted directly or a monthly April 230 or 235P could be purchased. The stop would be just above the 240 level around 240.50 or 241. Another approach would be a bearish spread like selling the weekly 240 call and buying the 245 call. At current prices this spread could be sold for 1.46 credit. I would use 242.50 as my stop on a spread trade.

If price hits the swing low at approximately 214.87 and looks to be ready to rebound on the 1-hour intraday chart a long trade could be triggered. I would either buy shares of TSLA, buy an April 220C or sell a weekly 215 or 220 put. At 214.87 these puts would be worth $3 and $5 respectively. The initial profit target would be the 8 day EMA, today’s high and finally the 240 level.

If I buy the monthly options I would buy at least 3 contracts and with the intention of closing the remaining contracts at the lower Fibonacci levels.

TSLA 3-28

 


 

March 22, 2016

Good Day Traders,

Market Update: I always update the IBD 50 on Tuesday’s and Friday’s when the new list are posted. Today I took a look at what kind of stocks are showing up in the Top 10 of the IBD 50. Remember this list is supposed to be an elite list of growth stocks. But what does today’s list tell us about the economy. The number one stock is a concrete company, then there’s building hand tools and even a gun company. What clear theme for the economy are the stocks on this list showing us? Great question. The Top 10 seems to be a very eclectic group with no clear industry seizing control. It does seem that some of these “growth” stocks may not be as growth oriented as one might expect. So does this reveal any clues about the underlying economy? We’ll see.

Today’s Tracking Indexes were mixed with the NDX pushing higher with both the SPX and RUT just marking time but not breaking down. The S&P moved sideways and did finish with a spinning top Bearish Harami. Normally this is considered a bearish reversal signal but this market has had some staying power since the bounce started on 2/11. Momentum continues to slide lower and the TSI appears to be topping just above the +50 level. We can expect several scenarios moving forward. Fist the S&P could just move sideways as the moving averages catch up with its steep ascent. Secondly price could provide a pullback opportunity. A healthy pullback from today’s high would move price back down between the 1904 and 1962 levels. Of course support from any of the moving averages could stop the magnitude of this pullback. At this point there has been no overt move down except for a couple of intraday trips to the 8 day EMA. If we get a symmetric move similar to that of early November 2015 then price would retrace to the 38.2% Fib Retracement which is at the 1962 level. Interesting how that works out!

The third scenario would find price continuing to drift higher until resistance around 2075 is either hit or taken out. Price could bounce off the lower trend line and move higher.

Spx 3-22

For the NDX a second day close above the 200 day moving average is positive, but the tail on today’s candle shows that sellers came in at a resistance level around 4451. Like the S&P any initial move down will be treated like a pullback and potential buy opportunity.

The Russell is the wild card for the Tracking Index. Price is well below the 200 day average and negative divergence is showing up on daily chart. If the Indexes are going to descend the RUT may be the early leader to the downside. There is strong support at the 1060 level.

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

Managing Existing Trades: Only Strategy III trades open.

Strategy I Portfolio Building: No Open Trades.

Strategy II Income Generation: No Open Trades—if you trade options this is a good strategy to send up trial trades to see if the market’s direction may be changing. 1-5 contracts of one of the Index ETFs may provide less downside risk than long position in the underlying Index ETF. Trading options is not for everyone and I strongly encourage members to first become successful trading stocks and ETFs.

Strategy II stocks of interest for this week: AMZN, TSLA, AZO, SBUX, NFLX & BIDU.

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Down -5%; Premium Collected since opening trade on 1/4/16 = $1381

Opened 2 contracts SPY Mar4 202 for a 2.96 Credit–$592 potential Profit
Opened 2 contracts SPY Mar4 204.5C for a 1.18 Credit–$236 potential Profit
(Expecting a pullback to approximately the 8 day EMA, will close out both Mar4 call positions at that point regardless of value and look to short the Put side.)

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 34%; Premium Collected since opening trade on 9/28/15 = $7222

Waiting for new entry—TSLA has been on a tear with a price target around $240, pullbacks have been primarily intraday so expect text and email alerts intraday. Until the uptrend line is violated and prices close below this level I will sell ITM Puts on pullbacks. Until we are sure we have a top in place. Watch for a pullback to the 227 level.

TSLA update: New upside target of 330ish was issued today, so move upside may be in order. If price so go up that much between now and January 2017 our long positions combination will continue to be profitable and meet our 100% objective for the holding period.

Pre-Earnings Trade: Only a few more weeks left in the current earnings season. In an up trending market many stocks will provide upside trades with expected returns between 5% – 20%. Here are some potential stocks that may provide pre-earning moves: CALM report over the next few days/weeks and may provide pre-earnings run.

Potential Set Ups for this week: Pullbacks on stocks for long entries are working, this week may be a great week for pullbacks. Watch SBUX and LGIH for orderly pullback opportunities., Look for orderly pullbacks on below average or shrinking volume. If you are unable to watch the markets through the day, then choose a couple of the stocks like TSLA, AMZN NFLX or the Index Leveraged ETF’s and watch these. Having too many stocks can cause loss of focus. I will be identifying specific focus zones as they appear on some of the stocks below so you can plan trades. This way regardless is an alert goes out or not you will have a handful of stocks/ETFs you will be ready to move on.

Upside: Many stocks are extended but have put in a very orderly rebound, until weakness comes back into the market pullbacks are the ideal entry opportunity. Trade the pullbacks until they stop working. TSLA on a pullback to retest breaking the downtrend line. LGIH, SIX, CALM, & SBUX.

Downside: AMZN, ANET & INCY.

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (240 resistance/140 support), AMZN, GOOGL, FB, NFLX (negative divergence), FDX, SBUX**, SIX, LGIH**, VEEV, TREX, PYPL, NKE & SEDG (Range bound with support at 22).

Stocks identified by ** that are close to a potential entry point.

Early Warning Alerts for Leveraged Index ETFs: Waiting for Second Chance Entry trigger and Alert reset.


 

March 21, 2016

Good Day Traders,

Note the “How to Make Money Trading Stocks” Webinar will be this Thursday because the Market will be closed for Good Friday.

Market Update: Both the S&P and the NDX pushed higher today on falling Momentum. The Russell tried to join the party but stalled. The RUT finished with a Bearish Harami. Taking each member of the Tracking Index separately shows that the SPX remains the strongest and only a little over 1% away from strong resistance at 2075. The angle of ascent remains steep for a sustainable uptrend but a sideways move or pullback would reduce the overbought pressure that may continue to mount until a reversal clue appears. On the chart below the negative divergent Momentum is obvious and the TSI has reached above the +50 level. While price can continue to climb when the TSI moves above +50 reaching this threshold tends to signal that the upward price action may soon be coming to an end. Over the past several years this indicator rarely stays above the +50 level more than 20 days prior to rolling over. When the TSI rolls over it does not mean the Index will also rollover but it often proceeds a negative divergence on the TSI which does lead to a tradable pullback. At this point in the current rally we will not trade the first move down but wait for testing and the higher probability divergence. Any pullback to the 8 or 20 day EMA’s would be considered opportunities to go long the SPY or UPRO for the rest of the ride up.

spx 3-21

The Nasdaq 100 closed above the 200 day moving average today. Price action moved closer to a resistance zone between 4480 and 4500. Like the S&P TSI is pressing higher while Momentum is moving down reflecting a divergence between oscillators. Wait for a pullback to the 8 or 20 day EMA’s to go long.

With a Bearish Harami showing up on the Russell this may be the first clue of a trend reversal. The question is how significant a pullback will result. Unlike the other Indexes the RUT is showing negative divergence in both TSI and Momentum. With this negative divergence in place I would entertain a short trade on either IWM or buying TZA. If TZA moves back to resistance it would be a move of over 10%. A small position on confirmation may be in order at this level.

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

 

Managing Existing Trades: Only Strategy III trades open.

Strategy I Portfolio Building: No Open Trades.

Strategy II Income Generation: No Open Trades—if you trade options this is a good strategy to send up trial trades to see if the market’s direction may be changing. 1-5 contracts of one of the Index ETFs may provide less downside risk than long position in the underlying Index ETF. Trading options is not for everyone and I strongly encourage members to first become successful trading stocks and ETFs.

Strategy II stocks of interest for this week: AMZN, TSLA, AZO, SBUX, NFLX & BIDU.

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Down -5%; Premium Collected since opening trade on 1/4/16 = $1381

Opened 2 contracts SPY Mar4 202 for a 2.96 Credit–$592 potential Profit
Opened 2 contracts SPY Mar4 204.5C for a 1.18 Credit–$236 potential Profit
(Expecting a pullback to approximately the 8 day EMA, will close out both Mar4 call positions at that point regardless of value and look to short the Put side.)

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 34%; Premium Collected since opening trade on 9/28/15 = $7222

Waiting for new entry—TSLA has been on a tear with a price target around $240, pullbacks have been primarily intraday so expect text and email alerts intraday. Until the uptrend line is violated and prices close below this level I will sell ITM Puts on pullbacks. Until we are sure we have a top in place. Watch for a pullback to the 227 level.

TSLA update: New upside target of 330ish was issued today, so move upside may be in order. If price so go up that much between now and January 2017 our long positions combination will continue to be profitable and meet our 100% objective for the holding period.

 

Pre-Earnings Trade: Only a few more weeks left in the current earnings season. In an up trending market many stocks will provide upside trades with expected returns between 5% – 20%. Here are some potential stocks that may provide pre-earning moves: CALM report over the next few days/weeks and may provide pre-earnings run.

Potential Set Ups for this week: Pullbacks on stocks for long entries are working, this week may be a great week for pullbacks. Watch SBUX and LGIH for orderly pullback opportunities., Look for orderly pullbacks on below average or shrinking volume. If you are unable to watch the markets through the day, then choose a couple of the stocks like TSLA, AMZN NFLX or the Index Leveraged ETF’s and watch these. Having too many stocks can cause loss of focus. I will be identifying specific focus zones as they appear on some of the stocks below so you can plan trades. This way regardless is an alert goes out or not you will have a handful of stocks/ETFs you will be ready to move on.

Upside: Many stocks are extended but have put in a very orderly rebound, until weakness comes back into the market pullbacks are the ideal entry opportunity. Trade the pullbacks until they stop working. LGIH, SIX, CALM, SBUX, & NKE does have earnings on 3/22.

Downside: AMZN, ANET & INCY.

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (240 resistance/140 support), AMZN, GOOGL, FB, NFLX, FDX, SBUX**, SIX, LGIH**, VEEV, TREX, PYPL & SEDG.

Stocks identified by ** that are close to a potential entry point.

Early Warning Alerts for Leveraged Index ETFs: Waiting for Second Chance Entry trigger and Alert reset.


 

March 17, 2016

Good Day Traders and Happy Saint Patrick’s Day!

Market Update: The Tracking Indexes were mixed today. Very interesting how the two indexes that benefited from the soft Fed stance outperformed the NDX which finished down slightly. Tomorrow will be a very interesting day filled with tension from two different direction. First, tomorrow is “Quadruple-Witching” which tends to have an upward bias as options expire. The opposite force against this upward bias is that the SPX rebalances tomorrow. This event tends to move the market to the downside in the last hour of the day. Tomorrow is the second day after the dovish Fed statement so we’ll see today’s initial reaction holds.

Additionally price moves often show symmetry with past moves. The current short term uptrend has lasted about 25 trading days. Back in late September and October of 2015 there was a similar steep move to what we are currently experiencing. This move ended on the 26 trading day of the uptrend. The gain in those 26 days was a bit over 13% for the S&P. The current move is a bit over 13%! I’m not calling a top, but there is symmetry and similarity.

The ascending wedge I drew on the SPX chart this past weekend is still in effect. While this is a Bearish formation at this point while momentum is showing some divergence as the SPX moves higher price is running into resistance at the 2050 level. There are not active reversal candlesticks on the daily charts. Until these appear and price moves out of the wedge formation the current uptrend will continue.

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

 

Managing Existing Trades: Only Strategy III trades open.

Strategy I Portfolio Building: No Open Trades.

Strategy II Income Generation: No Open Trades—if you trade options this is a good strategy to send up trial trades to see if the market’s direction may be changing. 1-5 contracts of one of the Index ETFs may provide less downside risk than long position in the underlying Index ETF. Trading options is not for everyone and I strongly encourage members to first become successful trading stocks and ETFs.

Strategy II stocks of interest for this week: AMZN, TSLA, AZO, NFLX & BIDU.

I would like to know if any of the Special Trade (Option) members would like to trade some low risk—high reward spreads. I do not know the comfort level for members regarding options. But there have been some excellent set-ups for these using weekly and monthly options. If you are comfortable with spreads please send me an email at dww@activetrendtrading.com .

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

 

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 0.01%

**I did not execute the stop on SPY Mar 200C because I believe there will be a pullback tomorrow to at least 202. At this point I will close the 200C position. I will place a both trades at 0.10 above today’s high at 205.33. If prices stay below this level I will roll these contracts out to next week during the last hour of trading.

Opened 2 contracts SPY Mar 200C for a 2.46 Credit–$492 potential Profit
Opened 1 contracts SPY Mar 202.5C for a 1.25 Credit–$224 potential Profit

Closed 1 contracts SPY Mar 202.5C at 0.62 for a profit of $0.64 or $64 per contract x 1 contracts = $64
Closed 4 contracts SPY Mar 200P at 0.11 for a profit of $1.15 or $115 per contract x 4 contracts = $460

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 39%

No open TSLA Short Positions

TSLA has been doing very well over the last several weeks with an upside target of $240 per analyst. It still has big daily swings so a slightly different tack is in order which will close positions earlier with less profit but having both a put and call position to mitigate movement. The alerts on TSLA may come more frequently given current price action. Currently it appears that price for the week may pin at about $210. Significant open interest at this level on both puts and calls expiring this Friday.

 

Pre-Earnings Trade: Only a few more weeks left in the current earnings season. In an up trending market many stocks will provide upside trades with expected returns between 5% – 20%. Here are some potential stocks that may provide pre-earning moves: CALM, NKE & NOAH report over the next few weeks and may provide pre-earnings run. NOAH reports on 3/16 AMC. NKE and CALM may be the better candidates.

Potential Set Ups for this week: Like the Indexes many stocks have come straight of the bottom with a very steep ascent. Ascents this steep tend to either fail hard or stall out and move sideways at some point. If the market also weakens here and plunges expect many of these stocks to do the same.

Upside: NKE (bounce off 8 day EMA) & AVGO. NKE does have earnings on 3/22.

Downside: INCY (at 8 day EMA or dropping 67.80, T1 = 65)—No Alert went out on this trade but it fulfilled as expected and came close to T1. Any retracement back towards the 8 day EMA may provide a second chance entry. Ultimate target is between 60 and 61. – Target hit 3/17

Other downside candidates include: ANET & EW**.

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (220 resistance/140 support), NTES, SFM, NFLX (bounce off the 8 day EMA), AMZN, OLED, PYPL, USCR**, LGND, AHS, SEDG (symmetric triangle), SBUX & VEEV (Hammer at the 50 day EMA).

Early Warning Alerts for Leveraged Index ETFs: Waiting for Second Chance Entry trigger and an Alert reset. If Indexes reverse to the downside I will look for Leveraged Inverse ETF trades.


 

 

March 15, 2016

Good Day Traders,

Market Update: Tomorrow at about 11 a.m. PDT we’ll know what the Fed is going to do and perhaps have an idea of what may happen later in the year regarding future rate hikes. With Yellen holding a live news conference after the announcement none of the Tracking Indexes moved out of their holding pattern today. Good day for finishing taxes! The last time Yellen spoke the markets dropped hard and it started a significant selloff, will this happen tomorrow? If the Fed acts out of synch with Europe and the rest of the world what is that likely to do? Regardless tomorrow should be an interesting day. Fed days are a lot like the day of earnings for individual stocks. If a trader has a significant profit margin they can weather the storm, but for shorter term traders they will shy away from opening any big position prior to the announcement.

All three Indexes marked time today with the overall market being mixed. The Dow was up slightly with the SPX, NDX and RUT finishing down. The RUT was down the most because if the Fed does raise rates it will be hurt the most. Both the NDX and SPX simply treaded water.

On the daily chart of the SPX below I want to highlight a couple of scenarios. First price is just below the 200 day moving average. There is a slight negative divergence on both the Momentum and TSI indicators. Upward price movement has also stopped just shy of the 161.8% Fib Extension. Thus scenario one is these levels of resistance will hold and reject any further price advance and reverse into a significant pullback. Each of the Fib Extension level on the way down may serve as support. The second scenario is price blows through the resistance and moves towards resistance formed by a down trend resistance line connecting highs of 11/3 and 12/2/15. Then there is the resistance at the 200% Fib Extension. Breaking through the 161.8% extension a move of 2.5% up to the 200% extension.

Now with that said there is also a strong possibility that price by the end of the week will retreat and close at around 2000 on the S&P. For those of you who trade options take a look at the large open interest on the SPY 200 Calls that expire this Friday. When the number of open interest on either the put or call side is significantly larger than other strike price it tells us that someone has made a big bet (typically covered calls) that price on the S&P will near or below that particular level. We shall see if price pin near 2000 on the S&P on Friday thus making all those calls close to worthless!

SPX 3-15

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

Managing Existing Trades: Only Strategy III trades open.

Strategy I Portfolio Building: No Open Trades.

Strategy II Income Generation: No Open Trades—if you trade options this is a good strategy to send up trial trades to see if the market’s direction may be changing. 1-5 contracts of one of the Index ETFs may provide less downside risk than long position in the underlying Index ETF. Trading options is not for everyone and I strongly encourage members to first become successful trading stocks and ETFs.

Strategy II stocks of interest for this week: AMZN, TSLA, AZO, NFLX & BIDU.

I would like to know if any of the Special Trade (Option) members would like to trade some low risk—high reward spreads. I do not know the comfort level for members regarding options. But there have been some excellent set-ups for these using weekly and monthly options. If you are comfortable with spreads please send me an email at dww@activetrendtrading.com .

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 0.01%

If the market drops a bit prior to the Fed meeting, I will lighten both of these positions by buying back 1 contract each at 1/2 the premium collected.

Opened 2 contracts SPY Mar 200 for a 2.46 Credit–$492 potential Profit
Opened 2 contracts SPY Mar 202.5C for a 1.25 Credit–$224 potential Profit
Opened 4 contracts SPY Mar 200P for a 1.26 Credit–$504 potential Profit

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 39%

Sold 1 contract of TSLA Mar 207.5C at 5.40 worth $540 per contract
Stop hit today at 10.30 – Loss of $490

TSLA has been doing very well over the last several weeks with an upside target of $240 per analyst. It still has big daily swings so a slightly different tack is in order which will close positions earlier with less profit but having both a put and call position to mitigate movement. The alerts on TSLA may come more frequently given current price action. Currently it appears that price for the week may pin at about $210. Significant open interest at this level on both puts and calls expiring this Friday.

Pre-Earnings Trade: Only a few more weeks left in the current earnings season. In an up trending market many stocks will provide upside trades with expected returns between 5% – 20%. Here are some potential stocks that may provide pre-earning moves: CALM, NKE & NOAH report over the next few weeks and may provide pre-earnings run. NOAH reports on 3/16 AMC. NKE and CALM may be the better candidates.

Potential Set Ups for this week: Expect most stocks to also be in a holding pattern waiting for the Fed. I will look for support and resistance bounces on the stocks below.

Upside: NKE (bounce off 8 day EMA) & AVGO. NKE does have earnings on 3/22.

Downside: INCY (at 8 day EMA or dropping 67.80, T1 = 65)—No Alert went out on this trade but it fulfilled as expected and came close to T1. Any retracement back towards the 8 day EMA may provide a second chance entry. Ultimate target is between 60 and 61.

Other downside candidates include: ANET & EW.

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (220 resistance/140 support), NTES, SFM, NFLX (bounce off the 8 day EMA), AMZN, OLED, PYPL, USCR**, LGND, AHS, SEDG & VEEV.

Early Warning Alerts for Leveraged Index ETFs: Waiting for Second Chance Entry trigger and an Alert reset. If Indexes reverse to the downside I will look for Leveraged Inverse ETF trades.

 


 

March 14, 2016

Good Day Traders,

Market Update: As highlighted in the Trader’s Report expect prices on the Tracking Indexes to remaining in a holding pattern until after the Fed announcement on Wednesday. Today’s price action did not do anything to change this expectation. The markets were mixed in light trading with the RUT and SPX being down a bit and the NDX up a bit. Unless there is some market moving news out between now and Wednesday we can expect more of the same tomorrow. I will hold off planning any long or short trades on the Indexes until after the smoke clears.

The S&P closed just below the downtrend line highlighted in the Trader’s Report at the 200 day moving average. It did form a doji Harami which is a bearish reversal signal but also a signal of indecision.

If the Fed does tighten then expect the RUT to fall which may result in some downside in the other Indexes as well. The NDX pushed higher from Friday’s action but the upper wick of today’s candle shows that there is a resistance zone at the 4378 level. On both the SPX and NDX there is a hint of negative divergence on the daily chart. Because of the Fed meeting this week I will not read too much into this clue and wait for a clear direction after the Fed. The Russell also put in a Bearish Harami on the daily chart but held above the 100 day moving average.

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

Managing Existing Trades: Only Strategy III trades open.

Strategy I Portfolio Building: No Open Trades.

Strategy II Income Generation: No Open Trades—if you trade options this is a good strategy to send up trial trades to see if the market’s direction may be changing. 1-5 contracts of one of the Index ETFs may provide less downside risk than long position in the underlying Index ETF. Trading options is not for everyone and I strongly encourage members to first become successful trading stocks and ETFs.

Strategy II stocks of interest for this week: AMZN, TSLA, AZO, NFLX & BIDU.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Last Week’s Trades:
SPY: Profit +$469
TSLA: Loss -$25

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 0.01%

If the market drops a bit prior to the Fed meeting, I will lighten both of these positions by buying back 1 contract each at 1/2 the premium collected.

Opened 2 contracts SPY Mar 200 for a 2.46 Credit–$492 potential Profit
Opened 2 contracts SPY Mar 202.5C for a 1.25 Credit–$224 potential Profit

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 39%

Sold 1 contract of TSLA Mar 207.5C at 5.40 worth $540 per contract (Came close to stopping out today, will look to add one more short call to take advantage of intraday volatility. Like the SPY will close position if price gets to 1/2 of premium collected prior to Fed.)

Pre-Earnings Trade: Only a few more weeks left in the current earnings season. In an up trending market many stocks will provide upside trades with expected returns between 5% – 20%. Here are some potential stocks that may provide pre-earning moves: CALM, NKE & NOAH report over the next few weeks and may provide pre-earnings run. NOAH reports on 3/16 AMC. NKE and CALM may be the better candidates.

Potential Set Ups for this week: Expect most stocks to also be in a holding pattern waiting for the Fed. I will look for support and resistance bounces on the stocks below.

Upside: NKE (bounce off 8 day EMA) & AVGO. NKE does have earnings on 3/22.

Downside: INCY (at 8 day EMA or dropping 67.80, T1 = 65)

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (217 resistance/140 support), NTES, SFM, NFLX (bounce off the 8 day EMA), AMZN, OLED, PYPL, USCR, LGND, AHS & VEEV.

Early Warning Alerts for Leveraged Index ETFs: Waiting for Second Chance Entry trigger and an Alert reset.

 


March 10, 2016

Good Day Traders,

Market Update: And the winner is…..No One!

Today’s market was amazing! Started with gap to resistance on the great news that the ECB is going to reduce interest rates and go even more negative on their lending rate. The gap up lasted all a little over a nanosecond and started falling right out of the gate. Mid-way through the trading sessions price rebounded back to finish almost unchanged for the day on each of the three Tracking Indexes. The range of today’s move encompassed the price action from the previous six days forming a large outside day at the end of a relief rally. Are price going to plunge from this point? I don’t think they will and while we may test the slightly lower support zones on each Index, each appears content to remain in a “holding pattern” waiting for the Fed announcement next Wednesday, March 16th. Over the next 3 trading days prices may be content to bounce in the 2% range from the 1969 up to the 2009 levels.

For Tomorrow: The following potential trade scenario would work on any of the Tracking Indexes because each is following similar price action patterns. Basically at the top of the range there may be an opportunity for downside trade and at the bottom there may be a long set-up with bouncing off either the ceiling or the floor the signal. Next choice is to wait until after the Fed announcement and then choose a direction. On the chart below the down trending channel is also visible. If price fail at this level then that tells us that the momentum may accelerate to the downside. A push up to the channel line would provide a stronger downside set-up.

The Nasdaq 100 currently shows the weakest price action with today’s move slipping briefly below the 20 day EMA. Today’s price action finished with a spinning top doji candlestick. One of the rules of Doji’s is that if one is significant many are even more significant and may be predictive of a larger move. Today makes the seventh small bodied day since failing to break through the 100 day moving average last week. If sellers do reclaim ownership of the Indexes the NDX ETFs may provide the best ride down.

The Russell is the Index in the middle. Prices today close slightly below the 8 day EMA. Its rebound today was muted compared to the other Indexes. Additionally the 8 and 20 day EMA are rolling over more quickly than the other Indexes so the IWM or some of the other RUT ETFs may provide some downside opportunities. With the daily ranges increasing again if one trades Puts on the non-leveraged Index ETFs be quick to take profits at set price levels. Today’s range on the IWM was 2.68 so a move of half or three quarters of this would provide a nice quick return on a high Delta option.

If prices close around today’s levels tomorrow then each of the Tracking Indexes will finish the week with a Bearish Harami a reversal signal.

SPX 3-10

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

 

Managing Existing Trades: SQQQ trade active for Strategy I. Strategy III trade ongoing.

Strategy I Portfolio Building: Bought 460 shares of SQQQ at 21.30 based on the stalling action and gap down by NDX.

Profit targets are 10% and 20% above purchase price. I will sell ½ of the position at both.

Stop Loss = -4% from purchase price but I may use the Swing Low for the actual stop. This would be a stop at -5.2%.

Note: I want to limit the holding time of any leveraged inverse ETF due to value slippage with time. These trading vehicles are intended for trades of short duration. So while all the indications are that this trade should be successful holding too long can turn a winner into a looser. I don’t want to hold for a period greater than 60 days.

Strategy II Income Generation: No Open Trades—if you trade options this is a good strategy to send up trial trades to see if the market’s direction may be changing. 1-5 contracts of one of the Index ETFs may provide less downside risk than long position in the underlying Index ETF. Trading options is not for everyone and I strongly encourage members to first become successful trading stocks and ETFs.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

 

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 1.61%

 

Opened 2 contracts SPY Mar2 200C for a 1.95 Credit–$390 potential Profit
Closed 1 contract of SPY Mar2 200C at 0.75 — Booked profit of $125
Today closed 1 contract of SPY Mar2 200C at 0.50 — Booked profit of $145

Opened 2 contracts SPY Mar2 201.5C for a 1.12 Credit–$224 potential Profit
Today closed 2 contract of SPY Mar2 201.5C at 0.10 — Booked profit of $204
Total SPY Booked Profit for Week = $474

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 37%

Sold 1 contract of TSLA Mar2 202.5C at 5.00 worth $500 per contract

 

Pre-Earnings Trade: Only a few more weeks left in the current earnings season. In an up trending market many stocks will provide upside trades with expected returns between 5% – 20%. Here are some potential stocks that may provide pre-earning moves: DG reports on 3/10 BMO (breakout on volume) & NKE 3/17 AMC (NKE may be finding a launch pad for the run nibble a little here?). Additionally AYI, CALM, FIVE and PLAY also report during March.

Potential Set Ups for this week: TSLA, NFLX and AMZN are each providing fast, large range moves almost daily. The challenge is timing entries to either the upside or downside and making those trades alerts available to members. Currently TSLA appears to be hitting resistance and may provide a downside Reversion to the Mean set up very soon. The best strategy for any of these big movers may be Strategy II with puts and calls for quick trades or Strategy I for upside only trades with ½ position sizes. TSLA has continues to work well with the Strategy III trades.

Upside: OLED & STMP (at breakout support of 114.39).

Downside: FB is not behaving well and is on a low volume wedge up trying to reach past highs. Market weakness may foil this plan. Additionally AMZN, NFLX, ANET & NTES may be setting up for a downside move.

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (215 resistance/140 support), NTES, SFM, NFLX, AMZN, OLED, PYPL & VEEV (Pullback to the 20).

Stocks identified by ** are holding up well and may be upside movers if the market strengthens.

Early Warning Alerts for Leveraged Index ETFs: Waiting for Second Chance Entry trigger to upside. SQQQ provided downside trade today.


March 8, 2016

Good Day Traders,

Market Update: Is the current pullback different than the one 8 days ago? Will today just lead to another unpredictable bounce off the 8 day EMA for the Tracking Indexes? A couple of clues that may help answer these question are present on the SPX chart below. First the 8 day EMA is still a level of support so no objective trigger to the downside. While Momentum and TSI appear to be turning over on this daily chart they are both still stronger than they were several weeks ago when the last relief rally popped up. Ideally to set up a higher probability downside trade a controlled drop to about the 20 day EMA and then a rebound towards yesterday’s swing high with negative divergence on a the Momentum Oscillators would be a stronger signal that the current relief rally is truly over and the lows from mid-February would be back in play for downside targets. Other momentum indicators I observer are also showing topping characteristics so if the current swing high from yesterday on the S&P holds this may be the turning point for more downside.

I really like to see price action hit against a moving average, rebound and then drop again. After several of these collisions with the moving average the slope of the moving average is hammered over until it final reverses course indicating that the shorter term trend is over. Again divergence is a strong clue to wait for and sometimes it shows up on the 1-hour Intraday chart while absent from the daily or weekly charts. At this point negative divergence is not present on the intraday chart either. We must treat current price action as simply an orderly pullback to one of the shorter term moving averages.

spx 3-8

The NDX and RUT both provided stronger downside moves today. The Nasdaq 100 closed just below the 50 day EMA and the Russell finished with a large bearish candle. Both of these Indexes did provide negative divergence on their 1-hour Intraday charts. Each of these indexes are showing clues of a downside move that are more mature than the early clues showing up on the S&P.

If NDX price drops below the 4246 level then the next potential support could be at either the 20 day EMA (4231) or the 38.2% retracement (4177). The NDX stalling pattern with the small bodied candles that started on 3/2 is a classic stalling and topping formation leading to a reversal. Of course while it provided the reversal point we must rely on the technical for pullback targets.

With the reversal on the Russell today there is a defined swing high at 1094.50 which can act as a stop if a downside trade does set up.

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

Managing Existing Trades: SQQQ trade active for Strategy I. Strategy III trade ongoing.

Strategy I Portfolio Building: Bought 460 shares of SQQQ at 21.30 based on the stalling action and gap down by NDX.

Profit targets are 10% and 20% above purchase price. I will sell ½ of the position at both.

Stop Loss = -4% from purchase price but I may use the Swing Low for the actual stop. This would be a stop at -5.2%.

Note: I want to limit the holding time of any leveraged inverse ETF due to value slippage with time. These trading vehicles are intended for trades of short duration. So while all the indications are that this trade should be successful holding too long can turn a winner into a looser. I don’t want to hold for a period greater than 60 days.

Strategy II Income Generation: No Open Trades—if you trade options this is a good strategy to send up trial trades to see if the market’s direction may be changing. 1-5 contracts of one of the Index ETFs may provide less downside risk than long position in the underlying Index ETF. Trading options is not for everyone and I strongly encourage members to first become successful trading stocks and ETFs.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 1.61%

Opened 2 contracts SPY Mar2 200C for a 1.95 Credit–$390 potential Profit
Closed 1 contract of SPY Mar2 200C at 0.75 today—Booked profit of $125

Opened 2 contracts SPY Mar2 201.5C for a 1.12 Credit–$224 potential Profit

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 37%
Sold 1 contract of TSLA Mar2 202.5C at 5.00 worth $500 per contract

 

Pre-Earnings Trade: Only a few more weeks left in the current earnings season. In an up trending market many stocks will provide upside trades with expected returns between 5% – 20%. Here are some potential stocks that may provide pre-earning moves: DG reports on 3/10 BMO, NKE 3/17 AMC, and BITA 3/10 BMO. Additionally AYI, CALM, FIVE and PLAY also report during March.

Potential Set Ups for this week: TSLA, NFLX and AMZN are each providing fast, large range moves almost daily. The challenge is timing entries to either the upside or downside and making those trades alerts available to members. Currently TSLA appears to be hitting resistance and may provide a downside Reversion to the Mean set up very soon. The best strategy for any of these big movers may be Strategy II with puts and calls for quick trades or Strategy I for upside only trades with ½ position sizes. TSLA has continues to work well with the Strategy III trades.

Upside: OLED & STMP.

Downside: FB is not behaving well and is on a low volume wedge up trying to reach past highs. Additionally AMZN, NFLX, ANET & NTES may be setting up for a downside move.

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (180 resistance/140 support), NTES, SFM, NFLX, AMZN, OLED, PYPL & VEEV.

Stocks identified by ** are holding up well and may be upside movers if the market strengthens.

Early Warning Alerts for Leveraged Index ETFs: Waiting for Second Chance Entry trigger to upside. SQQQ provided downside trade today.


 

March 7, 2016

Good Day Traders,

Note: I’ve received many emails from members regarding how the Reversion to the Mean entry techniques covered in a Mid-Week Training session has improved the ability to define market turning points. If you haven’t watched this training go to the Training Video Tab and find the training for February 23rd. Presentation slides are right below the video.

Market Update: The Tracking Indexes were mixed today with the RUT outperforming both the NDX and S&P. The NDX gapped down and finished the day with a spinning top candlestick within the recent resistance zone just below the 100 day Moving Average. Of the three the Nasdaq 100 appears to be weakest and is stalling out. TSI has crossed to the downside and Momentum continues to slope down.

The S&P finished up by less than $2.00 with a spinning top at a resistance zone around the 2000 level. Today’s price action was contained within last Fridays range forming an inside day which after either a uptrend or downtrend can be predictive of a reversal. The current resistance zone is between about the 1995 and 2010 levels. We shall see if this ceiling will repel the current rally and send price back down to support around 1960 or the 20 day EMA at 1940. Remember the 50% retracement level is at 1950. The chart below provides the daily picture of the S&P.

The Russell pushed higher with below average volume today. Prices did push closer to the 78.6% Fibonacci Retracement from the high on 12/29 and the low on 2/11/16. A strong zone of resistance resides at the 78.6% level. If price do break down and start violating the Fib Levels from the 62.8% this could be a clue that the current upswing is over.

I’ll be watching both the S&P and NDX for potential downside trades due to their looking weaker with signs of stalling evident.

spx 3-7

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

Managing Existing Trades: Opened small position in SQQQ today at 21.30. Place a an order on NKE but last Friday’s Hammer failed and price fell to the 200 day Moving Averages. I won’t take NKE off the list for a pre-earnings run, but when this kind of action takes place so close to earnings it may be indicative of potential negative earnings surprises.

Strategy I Portfolio Building: Bought 460 shares of SQQQ at 21.30 based on the stalling action and gap down by NDX.

Profit targets are 10% and 20% above purchase price. I will sell ½ of the position at both.

Stop Loss = -4% from purchase price but I may use the Swing Low for the actual stop. This would be a stop at -5.2%.

Strategy II Income Generation: No Open Trades—if you trade options this is a good strategy to send up trial trades to see if the market’s direction may be changing. 1-5 contracts of one of the Index ETFs may provide less downside risk than long position in the underlying Index ETF. Trading options is not for everyone and I strongly encourage members to first become successful trading stocks and ETFs.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 1.61%

Opened 2 contracts SPY Mar2 200C for a 1.95 Credit–$390 potential Profit
Opened 2 contracts SPY Mar2 201.5C for a 1.12 Credit–$224 potential Profit

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 37%
Sold 1 contract of TSLA Mar2 202.5C at 5.00 worth $500 per contract

Pre-Earnings Trade: Only a few more weeks left in the current earnings season. In an up trending market many stocks will provide upside trades with expected returns between 5% – 20%. Here are some potential stocks that may provide pre-earning moves: DG reports on 3/10 BMO, NKE 3/17 AMC, and BITA 3/10 BMO. Additionally AYI, CALM, FIVE and PLAY also report during March.

Potential Set Ups for this week: The market has just provided a tradable rally over the past 3 weeks. Most stocks are overbought and extended away from primary moving averages. Many are at or outside the 20 day moving average envelope so a pullback or rollover may be close. Our watch list reflects some new leaders that are worth watching and waiting for.

Long set ups continue to be in short supply, but many stocks are showing some signs of positive divergence. With the current market personality choosing one or two stocks and Index ETF’s is a good way to stay focused with potential short term trades for both Strategy I and Strategy II. I like TSLA, AMZN, NFLX and the Index ETFs for this focus currently and will look specifically for trades in each of these until the market’s personality changes.

Upside: OLED & STMP.

Downside: FB is not behaving well and is on a low volume wedge up trying to reach past highs. Market weakness may foil this plan.

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (180 resistance/140 support), NTES, SFM, NFLX, AMZN, OLED, PYPL & VEEV.

Stocks identified by ** are holding up well and may be upside movers if the market strengthens.

Early Warning Alerts for Leveraged Index ETFs: Waiting for Second Chance Entry trigger to upside. SQQQ provided downside trade today.

 


 

Good Day Traders,

Note: For members who also attend the BAMM Monthly meeting—I just reviewed Mike Trager’s slides for his special presentation this Saturday. They are Outstanding! Topic: How Bull Markets Die—Is it Different this Time? Don’t miss this presentation that will tie what’s going on in the market now to what has happened in the past just before the plunge!

Market Update: The relief rally continues but is showing some signs of weariness as upside velocity has now slowed the last two days. On the S&P price action stopped dead in the water at resistance from the swing low from 12/14 on the daily chart. Additionally note that the Momentum oscillatory is diverging from the TSI. This initial sign of weakness does not mean the Index won’t push higher, it just an initial clue. At this point there has been no sign of weakness on the daily candles over the past 3 days. The chart below shows how steep the ascent is of the 8 & 20 day EMAs. We know the velocity of this ascent cannot be maintained at this point there have been no price action clues saying the relief rally is getting ready to reverse.

If price continue to climb there is resistance levels with the next most significant one being the 20 period SMA on the Monthly Chart. This level is our predictor regarding the S&P putting in a similar pattern to 2008.

The NDX put in a second Bearish Hanging Man reversal pattern today just below the 100 day SMA on a daily chart. Like the S&P it also showed divergence between the TSI and Momentum Oscillators. As pointed out last night at the Mid-Week Training sessions observing the 3x Leveraged Index ETF in relationship to their 10% 20 day envelope can also provide clues as to potential turning point. TQQQ the 3x leveraged ETF for the NDX hit the top of the envelope on Tuesday and now has 2 reversal signals. We shall see if these confirm a reversal for at least a pullback to the 8-20 day EMA zone.

The Russell was the friskiest of the Indexes today moving up just below the 100 day moving average. It too is showing the same divergence as the other two Tracking Indexes. At this point there have been no reversal signals on any of the Tracking Indexes. The current price action has been taking place despite mixed economic news. At this point the each of the Indexes is getting extended from the 8 & 20 day moving averages and due for at least a pullback or pause.

Spx 3-3

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

Managing Existing Trades: Only Strategy III trades open.

Strategy I Portfolio Building: No Open Trades.

Strategy II Income Generation: No Open Trades—if you trade options this is a good strategy to send up trial trades to see if the market’s direction may be changing. 1-5 contracts of one of the Index ETFs may provide less downside risk than long position in the underlying Index ETF. Trading options is not for everyone and I strongly encourage members to first become successful trading stocks and ETFs.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 1.61%

Sold 4 contracts of SPY Mar1 199C at 0.85

Closed between 0.05 – 0.10

 

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 38%

Sold 1 contract of TSLA Mar1 195C at 3.15 worth $315.00 per contract
Closed position at 0.29 for a profit of $286

 

Pre-Earnings Trade: Only a few more weeks left in the current earnings season. In an up trending market many stocks will provide upside trades with expected returns between 5% – 20%. Here are some potential stocks that may provide pre-earning moves: AVGO & ROST report earnings this week on 3/3 and 3/1 respectively. DG reports on 3/10 BMO and NKE 3/17 AMC. BITA reports on 3/10 BMO.

Potential Set Ups for this week: With the current market personality choosing one or two stocks and Index ETF’s is a good way to stay focused with potential short term trades for both Strategy I and Strategy II. I like TSLA, AMZN, NFLX and the Index ETFs for this focus currently and will look specifically for trades in each of these until the market’s personality changes.

We’ve been doing very well selling premium in Strategy III against the long TSLA positions. TSLA, AMZN, NFLX along with the Leveraged Index ETFs are excellent candidates for very short term trades. The reason is that each has large daily & weekly moves and have been putting in good patterns both on charts of all time frames. TSLA is currently moving between $7 and $13 per day and trading these short swings can be rewarding. I recognize that intraday triggers do not fit for all members but with current market conditions there will be more of these. Text alerts and trade alerts will go out for notification for all.

Upside: NTES, NFLX & CALM. NTES may be setting up for a reversion trade as discussed last Wednesday.

Downside: SBUX & LNKD. Waiting for bounce downs near the 8 week EMA for short entries.

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (180 resistance/140 support), NFLX (Moving average squeeze that could resolve to the upside), AMZN, FB, HA, NKE, XRS, ELLI, ANET, FIVE, STZ & NOW

Stocks identified by ** are holding up well and may be upside movers if the market strengthens.

Early Warning Alerts for Leveraged Index ETFs: Waiting for Second Chance Entry trigger.


 

March 1, 2016

Good Day Traders,

Market Update: If you are finding the current market action frustrating and saying bad words under your breath you are not alone! After what appeared to be a return of the sellers, buyers immediately jumped back in today and put each of the indexes back on the relief rally track. The S&P was up over 2% today and closed right at the 62.8% Fib Retracement of the downtrend from 12/29 to 1/20. If the top of the Fib Box breaks look for an extension up to around 2000 as seen on the chart below.

As Mike highlighted at last Wednesday’s training session these large range daily moves are not the sign of a healthy market and these short lived uptrends tend to end with hard downturns. Currently the Indexes are providing upside with few proper entry points. Even looking at yesterday’s pullback to the 8 day EMA on the S&P and the NDX, neither pullback provided any clue of a potential rebound like we saw today. We’ll keep our eye on pullbacks to the 8 or 20 day EMA’s and look for proper entry triggers to the upside. For the S&P look for stalling at current levels or at the 2000 level.

What are some of the factors currently driving the buying? Between now and April 15th is the time when investors funnel funds into retirement accounts. Mutual fund managers investing those funds can provide an upward bias across the board. Positive expectations that the Fed will leave rates alone with the current global economic issues. Less focus on China could also be providing upward pressure. Overall while the underlying issues facing the market have not gone away these and other positive influences appear to be providing the catalyst that is pushing price action higher.

On the monthly chart today’s action pushed up towards the longer term 8 & 20 period moving averages. If this level holds then sellers could return just as quickly as the buyers appeared today.

spx 3-1

The NDX pushed up over 3% and the RUT moved up a bit over 2% from yesterday’s close. Every bearish reversal candle since the bottom on 2/11 has been voided. Like the S&P both of these indexes are pushing into higher levels of resistance but are not showing strong signs of reversing other than quick pullbacks to the 8 and 20 day EMAs. The clues that the uptrend is weakening and may reverse would be negative divergences on the TSI and/or Momentum. This may become apparent on an intraday 1-hour chart first. At this point there are no such clues.

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

Managing Existing Trades: Only Strategy III trades open.

Strategy I Portfolio Building: No Open Trades.

Strategy II Income Generation: No Open Trades—if you trade options this is a good strategy to send up trial trades to see if the market’s direction may be changing. 1-5 contracts of one of the Index ETFs may provide less downside risk than long position in the underlying Index ETF. Trading options is not for everyone and I strongly encourage members to first become successful trading stocks and ETFs.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 1.61%

No Short leg will look to open this week

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 38%

Sold 1 contract of TSLA Mar1 195C at 3.15 worth $315.00 per contract
Closed position at between 0.10 & 0.50

 

Pre-Earnings Trade: Only a few more weeks left in the current earnings season. In an up trending market many stocks will provide upside trades with expected returns between 5% – 20%. Here are some potential stocks that may provide pre-earning moves: AVGO & ROST report earnings this week on 3/3 and 3/1 respectively. DG reports on 3/10 BMO and NKE 3/17 AMC. BITA reports on 3/10 BMO.

Potential Set Ups for this week: With the current market personality choosing one or two stocks and Index ETF’s is a good way to stay focused with potential short term trades for both Strategy I and Strategy II. I like TSLA, AMZN, NFLX and the Index ETFs for this focus currently and will look specifically for trades in each of these until the market’s personality changes. Today TSLA hit a high and then sold off. Price ended with a bearish engulfing pattern on higher volume. Any testing between the 50 day EMA and the 196 level may provide a potential downside trade. In addition a hard break below the 8 day EMA at 181.94 could be used for a short side trigger.

Upside: NTES, NFLX & CALM. NTES may be setting up for a reversion trade as discussed last Wednesday.

Downside: SBUX & LNKD. Waiting for bounce downs near the 8 week EMA for short entries.

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (180 resistance/140 support), NFLX (Moving average squeeze that could resolve to the upside), AMZN, FB, HA, NKE, XRS, ELLI, ANET, FIVE, STZ & NOW

Stocks identified by ** are holding up well and may be upside movers if the market strengthens.

Early Warning Alerts for Leveraged Index ETFs: Waiting for Second Chance Entry trigger.

 


 

February 29, 2016

Good Day Traders,

Market Update: Sellers won the day and drove the Indexes down on higher volume. All the indexes have either dropped or backed away from the 50 day EMA to the downside. The daily charts appear to be set for more downside. ON the chart below a new Fib Box is in play based on the high of 2/26 and the low of 2/11. The question at this point is will the failure of the relief rally result in a drop just into the Fib Box or retracement to the bottom of the range at 1811 on the S&P? First the strength of this last relief rally was stronger than the one in January and if we are to get a repeat of similar price action as 2008 then a drop just into the Fib Box may provide an opportunity to go long one of the Index ETFs. On the other hand a retest around 1950 on the SPX might provide an opportunity to the downside. Additionally watch for a hard move below the 8 week EMA which could clear the way to at least the 1900 level.

Both the NDX and RUT are close to roll over point and may offer a better trade to the downside.

SPX 2-29

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

 

Managing Existing Trades: Only Strategy III trades open.

Strategy I Portfolio Building: No Open Trades.

Strategy II Income Generation: No Open Trades—if you trade options this is a good strategy to send up trial trades to see if the market’s direction may be changing. 1-5 contracts of one of the Index ETFs may provide less downside risk than long position in the underlying Index ETF. Trading options is not for everyone and I strongly encourage members to first become successful trading stocks and ETFs.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 1.61%

No Short leg will look to open this week

 

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 32%

Sold 1 contract of TSLA Mar1 195C at 3.15 worth $315.00 per contract

 

Pre-Earnings Trade: Only a few more weeks left in the current earnings season. In an up trending market many stocks will provide upside trades with expected returns between 5% – 20%. Here are some potential stocks that may provide pre-earning moves: AVGO & ROST report earnings this week on 3/1 and 3/3 respectively. DG reports on 3/10 BMO and NKE 3/17 AMC. BITA reports on 3/10 BMO.

Potential Set Ups for this week: Long set ups continue to be in short supply, but many stocks are showing some signs of positive divergence. With the current market personality choosing one or two stocks and Index ETF’s is a good way to stay focused with potential short term trades for both Strategy I and Strategy II. I like TSLA, AMZN, NFLX and the Index ETFs for this focus currently and will look specifically for trades in each of these until the market’s personality changes.

Upside: NTES & CALM. NTES may only be a pre-earnings trade.

Downside: SBUX & NTES. Waiting for bounce downs near the 8 week EMA for short entries.

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (180 resistance/140 support), NFLX, AMZN, FB, HA, NKE, XRS, ELLI, ANET & NOW

Stocks identified by ** are holding up well and may be upside movers if the market strengthens.

Early Warning Alerts for Leveraged Index ETFs: Waiting for Second Chance Entry trigger.

 


 

February 25, 2016

Good Day Traders,

Note: If you have not yet reviewed last night’s training it is very good and provides a very powerful tool for determining market turning points. Excellent comments back from the members who attended live.

You can view the training video at: http://activetrendtrading.com/training-webinar-recordings/

Market Update: The market still appears to be coupled to Oil! The Indexes were down slightly to start the day and then mid-day oil took off and so did the Indexes. The S&P nosed above resistance just below the 1950 level and closed at 1951.70. Moving above this level puts the S&P into a short term uptrend by technical definition. Both the NDX and RUT are lagging a bit behind the S&P, but both stayed in rally mode stopping just below their 50 day EMA. The NDX and RUT are just below their swing highs from 2/1 so if these levels are broken each of the Tracking Indexes will be in at least a short term uptrend within the context of a longer term downtrend. Remember this move up could last several weeks or months.

This current rally has been fairly steep with a brief pause for a few days at current levels. The 8 day & 20 day EMA’s on each Index has either crossed to the upside or is close to crossing. At this point we can use any pullback approaching the 8-20 moving averages for a potential long trigger. There is overhead resistance on the way up from here that we need to be aware of so waiting for the bounce off the moving average is the best approach. On the chart of the S&P below, today’s move above the swing high from 2/1 tells us that the probabilities of at least moving to the top of the Fib Box is good. The measured move of the double bottom like pattern on the S&P provides an upside target at the 2075 level. This is the exact zone we discussed in last night’s webinar. Other resistance may come into play at the 100 and 200 day moving averages.

If for any reason the markets decouple from Oil we may see price action diverging between the two. Right now the current rally is intact and trades to the upside should be the primary priority at proper buy points. I’ll be looking to the intraday charts for early signs of stalling. If you watch the video of last night’s training start sharpening your eye on all chart timeframes for the entries Mike and I presented using the moving average envelope and divergences.

SPX 2-25

Managing Existing Trades: No open trades except for Strategy III.

Strategy I: Stopped out of the ½ size short trade on NFLX. Today even the laggards rallied. This is positive for upside trades. Because the market has been so whippy taking ½ positions is an excellent way to limit downsize risk.

On 2/24 entered 70 shares of NFLX short at 89.49, hit stop at 93.08.
Loss = -$251.30

More Market Update and stock picks at: http://activetrendtrading.com/daily-market-updates/

Strategy II: No Open Trades—if you trade options this is a good strategy to send up trial trades to see if the market’s direction may be changing. 1-5 contracts of one of the Index ETFs may provide less downside risk than long position in the underlying Index ETF. Trading options is not for everyone and I strongly encourage members to first become successful trading stocks and ETFs.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

 

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 2.23%

Sold 4 contract of SPY Feb4 193C at 1.16 worth $116 per contract
Weekly Potential Profit = $464

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 23%

Sold 1 contract of TSLA Feb4 170C at 3.40 worth $340.00 per contract
Stop Hit closed for -$490 loss

Need set up to sell this week’s premium to cover loss.

Several members have asked about this strategy and a more detailed explanation is available at: http://activetrendtrading.com/wealth-and-income-strategy/ .

I posted a video about how to choose the weekly options to short for this strategy. It can be viewed at: http://activetrendtrading.com/videos/

Pre-Earnings Trade: Only a few more weeks left in the current earnings season. Due to the weakness in the market few stocks have provided solid pre-earning runs. Additionally few have provided solid set-ups from which to enter trades. In an up trending market many stocks will provide upside trades with expected returns between 5% – 20%. Here are some potential stocks that may provide pre-earning moves: AVGO, ROST & DG.

Potential Set Ups for this week: Even laggards rallied today. I’m upgrading NFLX to “On the Radar”. Its move over the past two days is telling us that it may be changing trend. Remember that 65% – 75% of stocks will emulate the indexes so watch for a similar reaction. With the current market personality choosing one or two stocks and Index ETF’s is a good way to stay focused with potential short term trades for both Strategy I and Strategy II. I like TSLA, AMZN, NFLX and the Index ETFs for this focus currently and will look specifically for trades in each of these until the market’s personality changes.

Upside: CALM & NKE (IBD Double Bottom Base)

Downside: LNKD, NOW & STZ. Waiting for bounce downs near the 8 week EMA for short entries.

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (190 resistance/140 support), AMZN, FB, HA, XRS, ELLI, ANET & SCAI

Stocks identified by ** are holding up well and may be upside movers if the market strengthens.

Early Warning Alerts for Leveraged Index ETFs: Alert has reset, waiting for trigger.

I will trade UPRO or SPXL for the SPX, TNA for the RUT and TQQQ for the NDX. If a downside trade triggers I will trade SPXU, SQQQ or TZA.


 

February 23, 2016

Good Day Traders,

Market Update: The ebbs and flow of the Indexes continue. All or nearly all of yesterday’s gains were wiped out with today’s price action on the Tracking Indexes. As each of you know this market continues to be very reactive to news! Today’s headline was the Saudi’s say no deal on oil. This sent oil down about 4.5% and the Indexes went along for the ride. The question for us is do we look for a downside trade or wait for a rebound? On one hand today’s drop may lead to a complete retracement to the lows of 2/11 which would be a great short trade. The other possibility asks will the convergence of the 8 day and 20 day EMA’s form a strong support level that is just a few point away and thus a bounce?

Breaking down today’s action by Index shows that the S&P gapped down and then finished close to the low of the day. Much like yesterday’s gap up and stall, today gapped down hit close to the low of the day during the first two hours and then stopped retreating. Currently support at the 1900 zone is very close to the 8 & 20 day EMAs. The NDX also gapped down and is sitting just above the 8 and 20 day EMAs. The NDX chart looks more like the start of a failed relief rally and a squeeze on the moving averages. The Russell provided the only bearish reversal signal garnishing a Bearish Harami. On all the Tracking Indexes the TSI is turning over but has not crossed to the downside.

The S&P daily chart below shows how the 50 day EMA did not hold up today and appears to be a line of resistance even though yesterday’s price action overshot this moving average.

How to Trade the Indexes: A gap down tomorrow morning would put price right at the 8 & 20 day EMA’s which may act as support. This makes going short or initiating a downside trade on a gap down a low probability trade. I will wait for a proper set up on an intraday 1 hour chart to take a trade to the downside. If price drops below the 50 period moving average on the 1 hour chart this would indicate a potential change in short term trend. It will also provide a price level to plan a trade from. If intraday price action rebounds to the 50 period EMA but fails to break this level this would be the potential price level to initiate a downside trade. The same analysis works for all three Indexes. One could either short the Index ETF, buy a put on the ETF or buy the inverse leveraged Index ETF and use a 4% stop.

SPX 2-23

Managing Existing Trades: Only Strategy III trades are opened.

Strategy I: No Open Trades

Strategy II: No Open Trades—if you trade options this is a good strategy to send up trial trades to see if the market’s direction may be changing. 1-5 contracts of one of the Index ETFs may provide less downside risk than long position in the underlying Index ETF. Trading options is not for everyone and I strongly encourage members to first become successful trading stocks and ETFs.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position. I only use this tactic when there a strong convergent clues of a trend change. I want to be in and out within just a couple of days.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 2.23%

Sold 4 contract of SPY Feb4 193C at 1.16 worth $116 per contract
Weekly Potential Profit = $464

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 23%

Sold 1 contract of TSLA Feb4 170C at 3.40 worth $340.00 per contract
Stop Hit closed for -$490 loss

Need set ups to sell this week’s premium to cover loss.

Several members have asked about this strategy and a more detailed explanation is available at: http://activetrendtrading.com/wealth-and-income-strategy/ .

I posted a video about how to choose the weekly options to short for this strategy. It can be viewed at: http://activetrendtrading.com/videos/

Pre-Earnings Trade: Only a few more weeks left in the current earnings season. Due to the weakness in the market few stocks have provided solid pre-earning runs. Additionally few have provided solid set-ups from which to enter trades. In an up trending market many stocks will provide upside trades with expected returns between 5% – 20%. Here are some potential stocks that may provide pre-earning moves: AVGO, ROST & DG.

Potential Set Ups for this week: If the markets do sell off at this point back down to previous support look for bounce trades in leading stocks. 65% – 75% of stocks will emulate the indexes so watch a similar reaction. With the current market personality choosing one or two stocks and Index ETF’s is a good way to stay focused with potential short term trades for both Strategy I and Strategy II. I like TSLA, AMZN, NFLX and the Index ETFs for this focus currently and will look specifically for trades in each of these until the market’s personality changes.

Upside: CALM

Downside: FB, NFLX, LNKD, NOW & STZ. Waiting for bounce downs near the 8 week EMA for short entries.

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (180 resistance/140 support), AMZN, FB, HA, NKE, XRS, ELLI, ANET & SCAI

Stocks identified by ** are holding up well and may be upside movers if the market strengthens.

Early Warning Alerts for Leveraged Index ETFs: Alert has reset, waiting for trigger.

I will trade UPRO or SPXL for the SPX, TNA for the RUT and TQQQ for the NDX. If a downside trade triggers I will trade SPXU, SQQQ or TZA.

 


 

February 22, 2016

Good Day Traders,

Market Update: As discussed in the weekend Trader’s Report one of the potential moves was a gap up into resistance and that is exactly what happened today. On the S&P prices gapped up hit resistance and then stayed within a 0.35% range the rest of the day. Today’s move was done within the first half hour. Many stocks made the same move with no proper entry point to go long. The S&P has retraced to the previous swing highs just below the 1950 zone which also corresponds with the 50% Fibonacci Retracement shown on the chart below. If price action moves above the 1950 level and holds then the upside target will be around 2075. The 2075 level was the swing high from December 29, 2015.

When the indexes are moving as quickly as they currently are it is critical to maintain both discipline and not chase or take low probability trades. I know that the waiting test our patience but patience is what’s called for.

The S&P is the strongest of the Tracking Indexes and closed back above the 50 day EMA. Both the NDX and RUT are lagging and hitting resistance below their 50 day. On each of the Indexes overhead resistance or supply could derail the current relief rally at several levels. On the S&P the 8 day EMA has crossed the 20 day EMA to the upside so these two moving averages may serve as support on any price pullback.

On each of the Indexes I’ll be looking for signs of stalling for a trade to the downside or a controlled pullback for an upside trade. Daily ranges are still above average and price movement is no yet controlled and stable. The velocity of the current ascent is straight up from a bottom. This type of climb cannot be maintained. The price action once the high has been hit will be telling regarding the potential staying power of the current move.

On the chart below it looks very much like a double bottom type base. Again there are multiple levels of resistance if a double bottom is confirmed to the upside.

SPX 2-22

Managing Existing Trades: Only Strategy III trades open.

Strategy I: No Open Trades

Strategy II: No Open Trades—if you trade options this is a good strategy to send up trial trades to see if the market’s direction may be changing. 1-5 contracts of one of the Index ETFs may provide less downside risk than long position in the underlying Index ETF. Trading options is not for everyone and I strongly encourage members to first become successful trading stocks and ETFs.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 2.23%

Sold 4 contract of SPY Feb4 193C at 1.16 worth $116 per contract
Weekly Potential Profit = $464

 

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 23%

Sold 1 contract of TSLA Feb4 170C at 3.40 worth $340.00 per contract
Stop Hit closed for -$490 loss

Need set up to sell this week’s premium to cover loss.

Several members have asked about this strategy and a more detailed explanation is available at: http://activetrendtrading.com/wealth-and-income-strategy/ .

I posted a video about how to choose the weekly options to short for this strategy. It can be viewed at: http://activetrendtrading.com/videos/

Pre-Earnings Trade: Only a few more weeks left in the current earnings season. Due to the weakness in the market few stocks have provided solid pre-earning runs. Additionally few have provided solid set-ups from which to enter trades. In an up trending market many stocks will provide upside trades with expected returns between 5% – 20%. Here are some potential stocks that may provide pre-earning moves: AVGO, ROST & DG.

Potential Set Ups for this week: Long set ups continue to be in short supply, but many stocks are showing some signs of positive divergence. With the current market personality choosing one or two stocks and Index ETF’s is a good way to stay focused with potential short term trades for both Strategy I and Strategy II. I like TSLA, AMZN, NFLX and the Index ETFs for this focus currently and will look specifically for trades in each of these until the market’s personality changes.

Upside: NTES & CALM. NTES may only be a pre-earnings trade.

Downside: NFLX, LNKD, NOW & STZ. Waiting for bounce downs near the 8 week EMA for short entries.

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (180 resistance/140 support), AMZN, FB, HA, NKE, XLS, ELLI, ANET & SCAI

Stocks identified by ** are holding up well and may be upside movers if the market strengthens.

Early Warning Alerts for Leveraged Index ETFs: Alert has reset, waiting for trigger.

I will trade UPRO or SPXL for the SPX, TNA for the RUT and TQQQ for the NDX. If a downside trade triggers I will trade SPXU, SQQQ or TZA.

 


 

February 18, 2016

Good Day Traders,

Market Update: A big part of today’s story is what didn’t happen. Sellers did come in but didn’t drive the Indexes down with a large range loss. Could this be the beginning of a change of character to favor the upside? Or could this be the calm before another plunge? One of these scenarios will work out over the next few days. With the velocity of the rise from last week a slow down at resistance is not a surprise.

The positives and negatives for the Tracking Indexes are as follows:

Favoring an Upside Move: Momentum on each Index looks like is ready to turn around. This may limit the downside to retracements to previous support. A sideways trading range may be forming, especially on the S&P. Price action rested today without a big sell-off. All three Tracking Indexes held above their 8 and 20 day EMAs.

Favoring the Downside: Resistance held around the 8 week EMA. Bearish candlesticks on the daily chart. NDX showed a Dark Cloud reversal pattern.

With each Index in a resistance zone, I will look for a short entry if today’s high is tested. To the long side I will wait for a bounce off the 8 or 20 day EMA. Anything in between these two zones is “No Man’s” Land.

SPX 2-18

Managing Existing Trades: Waiting for Strategy III trades to set up for next week.

Strategy I: No Open Trades

Strategy II: No Open Trades—if you trade options this is a good strategy to send up trial trades to see if the market’s direction may be changing. 1-5 contracts of one of the Index ETFs may provide less downside risk than long position in the underlying Index ETF. Trading options is not for everyone and I strongly encourage members to first become successful trading stocks and ETFs.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 6.97%

Revised Weekly Objective = $107.36 per week or $429.42 for 4 contracts for 48.29 weeks

Will look to open new positions tomorrow.

 

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 30%

Revised Weekly Objective = $308.62 per week for 48.29 weeks

Will look to open new positions tomorrow.

 

Several members have asked about this strategy and a more detailed explanation is available at: http://activetrendtrading.com/wealth-and-income-strategy/ .

I posted a video about how to choose the weekly options to short for this strategy. It can be viewed at: http://activetrendtrading.com/videos/

Pre-Earnings Trade: Currently in Q4 Earnings season. Pre-earnings candidates are stocks that tend to run prior to earnings between 5%-15%. We’ve seen a few stocks do a healthy pre-earnings run over the last week with an uptick in the Indexes. Remember this is a short term strategy aimed at capturing a portion of the pre-earnings run. Potential candidates are: NTES & YY.

Potential Set Ups for this week: With the current market personality choosing one or two stocks and Index ETF’s is a good way to stay focused with potential short term trades for both Strategy I and Strategy II. I like TSLA, AMZN and the Index ETFs for this focus currently and will look specifically for trades in each of these until the market’s personality changes.

Today there were several of the stocks on the potential short list showing bearish reversal signals.

Upside: Bases are being built but no early triggers. Stocks coming off of lower lows must prove themselves with constructive Action.

Downside: NOW (big earnings gap down wait for set up), NFLX (Dark Cloud Bearish Pattern), AMZN (Bearish Engulfing Pattern), & LNKD (Resistance at either 120 or 140). Waiting for bounce downs near the 8 week EMA for short entries.

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (Support at 140/Resistance at 180), XRS, HA, HII, GGAL, AOS & STZ

Stocks identified by ** are holding up well and may be upside movers if the market strengthens.

Early Warning Alerts for Leveraged Index ETFs: Alert has reset, waiting for trigger.

I will trade UPRO or SPXL for the SPX, TNA for the RUT and TQQQ for the NDX. If a downside trade triggers I will trade SPXU, SQQQ or TZA.


 

February 17, 2016

Good Day Traders,

Market Update: If you follow IBD indicators today was a follow through day and a new uptrend is confirmed. A reminder that while all new confirmed uptrends do not lead to a Bull Market, no Bull Market starts without one. So far in this rally attempt price action has moved up with mixed volume with three days with large daily ranges. Notice on the daily chart of the SPX below that the initial assent of the last 4 days has been straight up off the bottom a steep angle. Price action is quickly approaching the mid-section of the Fib Box at the 1950 level. This is the level of resistance has stopped two previous advances so it does represent significant resistance. If this level is breached then the next resistance zone is between 1980 and 1993. It is unfortunate that the current move up has been gap ups with no retracements for entries.

The NDX and RUT have levels of strong resistance and the 4300 and 1040 levels respectively. Watch for signs of stalling on all three Tracking Indexes as price action approaches these defined resistance levels. Time will tell if this second rally attempt has legs or will be more along the lines of what was experienced in 2008. If prices do follow a similar pattern then we can expect price to rally over the next 2-3 months as much as 14-23% above last Thursday’s low depending on Index. This significant move up did not change the overall personality of the market nor the internal weakness that led to the 2008 Bear Market. A similar argument can be made regarding current market conditions with the addition the current downtrend is stronger than what was present in 2008. Over the next few months price may have a bias to the upside until the very strong resistance is hit.

It would seem that much of the rally over the past four days is the result of increases in oil prices with the intent of several producers worldwide to reduce output. Add this to the growing probability that interest rates will not rise until much later in 2016 if at all this year. These catalyst may not have a long term influence and the scenario above will come to pass.

SPX 2-17

Managing Existing Trades: Today’s market reduced our profits in Strategy III when stop losses were hit. I’m currently waiting for a new set up on both trades with Strategy III. Even though the market has rebounded it has provide no proper entry points for either Strategy I or II. If this uptrend is sustained and price action becomes more orderly proper setups will be in the offing.

Strategy I: No Open Trades

Strategy II: No Open Trades—if you trade options this is a good strategy to send up trial trades to see if the market’s direction may be changing. 1-5 contracts of one of the Index ETFs may provide less downside risk than long position in the underlying Index ETF. Trading options is not for everyone and I strongly encourage members to first become successful trading stocks and ETFs.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 6.97%

Closed 2 contract of SPY Feb 188C Stop Loss Hit
Closed 2 contract of SPY Feb 187C Stop Loss Hit
Weekly Loss = -$1022
Revised Weekly Objective = $107.36 per week or $429.42 for 4 contracts for 48.29 weeks

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 30%

Closed 1 contract of TSLA Feb 157.5C Stop Loss Hit
Weekly Loss = -$490
Revised Weekly Objective = $308.62 per week for 48.29 weeks

Several members have asked about this strategy and a more detailed explanation is available at: http://activetrendtrading.com/wealth-and-income-strategy/ .

I posted a video about how to choose the weekly options to short for this strategy. It can be viewed at: http://activetrendtrading.com/videos/

Pre-Earnings Trade: Currently in Q4 Earnings season. Pre-earnings candidates are stocks that tend to run prior to earnings between 5%-15%. We’ve seen a few stocks do a healthy pre-earnings run over the last week with an uptick in the Indexes. Remember this is a short term strategy aimed at capturing a portion of the pre-earnings run. Potential candidates are: NTES & YY.

Potential Set Ups for this week: The biggest complaint from IBD today was that while they placed the market in “Confirmed Uptrend” there were very few stocks breaking out. This is partly because many growth stocks are coming off of new lower lows and just moving up towards overhead resistance. When this happens we wait for pullbacks and bounces for the emerging uptrend to prove itself. Additionally with the current market personality choosing one or two stocks and Index ETF’s is a good way to stay focused with potential short term trades for both Strategy I and Strategy II. I like TSLA, AMZN and the Index ETFs for this focus currently and will look specifically for trades in each of these until the market’s personality changes.

Upside: Bases are being built but no early triggers. Stocks coming off of lower lows must prove themselves with constructive Action.

Downside: NOW (big earnings gap down wait for set up), NFLX, NOW, AMZN (watch for short set-up at 540), & LNKD. Waiting for bounce downs near the 8 week EMA for short entries.

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (Support at 140/Resistance at 180), XRS, HA, HII, GGAL, AOS & STZ

Stocks identified by ** are holding up well and may be upside movers if the market strengthens.

Early Warning Alerts for Leveraged Index ETFs: Alert has reset, waiting for trigger.

I will trade UPRO or SPXL for the SPX, TNA for the RUT and TQQQ for the NDX. If a downside trade triggers I will trade SPXU, SQQQ or TZA.

 


February 11, 2016

Note: Beginning with today’s Update I will identify levels on some of the stocks where trades may set up. This will help members as they do their analysis to plan and target points for potential trades. I hope you find this feature useful.

Market Update: Today support was tested and held. Is it time for a bounce and are there other positives? The convergence of positive clues along with today’s new low on each of the Tracking Indexes may lead to a relief rally attempt. It isn’t back up the truck and load-up on long positions but a small nibble here and there may be in order.

The positive convergence of clues is visible on the daily chart of the SPX. Support at 1812 held even though the rebound was not strong, it is clear that buyers came in at this level. Both momentum oscillators are showing positive divergence. Any retesting between the 1825 and 1812 levels could trigger a short term long trade with either SPY or UPRO. The first upside target would the zone between 1867 and 1875. Above this resistance the next target would be the lower boundary of the Fib Box ant 1915 or the 20 day EMA. Each of the other Tracking Indexes are presenting a similar chart pattern. Traders can analyze where the levels of support and resistance are located on the NDX and RUT in order to translate those over to their individual ETFs. The final clue I would like to see in place is for both Momentum and TSI to actually reverse direction. This would greatly strengthen the case for at least a relief rally back to resistance.

Now for the other side. Both the Nasdaq 100 and Composite are on the brink of moving into Bear Territory. While each is at a point where a bounce would be appropriate the upside is limited as long as the corrective downtrend remains in effect. The Russell is only 9% from the highs of 2011. It is the weakest of the three Tracking Indexes.

If current market conditions continue we can expect quick up moves followed by quick sell-offs. Many of the institutions are using any upside move as an opportunity to lighten up on there positions. So we need to be patient and cautious. We can attempt to trade these countertrend trades but will need to take profits very quickly and keep downside stops very tight. We will also look to enter downside trades at appropriate resistance level. The challenge for trades to either direction is primarily due to the market moving with the global market during non-market hours. This results in gap ups and down with no proper set-up. This type of action is very common in correcting markets.

spx 2-11

Managing Existing Trades: Most of our gains this year have come from Strategy III. With the market volatility and lack of uniform pattern set ups this secondary strategy is up over 28% on the $20K of trading capital set aside for Strategy III. Strategy III is like a covered call strategy but instead of owning the underlying stock or ETF we own a LEAPS option which allows me to control 100 shares of the entity for every contract owned. This is what allows me to sell weekly options each week. The strategy is not for everyone but it is worth learning and practicing in order to have another tool in the tool box.

Strategy I: No Open Trades

Strategy II: No Open Trades—if you trade options this is a good strategy to send up trial trades to see if the market’s direction may be changing. 1-5 contracts of one of the Index ETFs may provide less downside risk than long position in the underlying Index ETF. Trading options is not for everyone and I strongly encourage members to first become successful trading stocks and ETFs.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/


Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 17%

Closed partial position buying 2 SPY Feb2 184.5P at Stop Loss = 2.85
Loss = 1.31-2.85 = -1.54 or $154 per contract x 2 contracts = -$308

 

Closed partial position buying 2 SPY Feb2 194C at Stop Loss = 2.53
Loss = 1.02-2.53 = -1.51 or $151 per contract x 2 contracts = -$302

Sold 2 contract of SPY Feb2 189C at 1.2 worth $120 per contract
Closed position at 0.05 for a profit of 1.15 or $115 per contract x 2 contracts = $230

Total Loss for Week = -$308 – $302 + $230 = -$380

Looking for Next Week’s set up on the SPY

 

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 41%

Sold 1 contract of TSLA Feb2 115P at 2.72 worth $272 per contract
Closed at 0.05: Profit 2.67 or $267 per contract

Sold 1 contract of TSLA Feb2 177.5C at 2.43 worth $243 per contract
Closed at 0.10: Profit 2.33 or $233 per contract

Weekly Profit = $500

 

Several members have asked about this strategy and a more detailed explanation is available at: http://activetrendtrading.com/wealth-and-income-strategy/ .

I posted a video about how to choose the weekly options to short for this strategy. It can be viewed at: http://activetrendtrading.com/videos/

Pre-Earnings Trade: Currently in Q4 Earnings season. Pre-earnings candidates are stocks that tend to run prior to earnings between 5%-15%. We’ve seen a few stocks do a healthy pre-earnings run over the last week with an uptick in the Indexes. Remember this is a short term strategy aimed at capturing a portion of the pre-earnings run. We do not hold these positions over earnings! Holding through earnings can be risky just ask those who held on to AMZN! Potential candidates are: HII and ANET.

Potential Set Ups for this week: Long set ups continue to be in short supply, but many stocks are showing some signs of positive divergence. With the current market personality choosing one or two stocks and Index ETF’s is a good way to stay focused with potential short term trades for both Strategy I and Strategy II. I like TSLA and the Index ETFs for this focus currently and will look specifically for trades in each of these until the market’s personality changes.

Upside: Bases are being built but no early triggers.

Downside: NOW (big earnings gap down wait for set up), FB, SBUX, NFLX, AMZN (watch for short set-up at 514), LNKD, NKE & AAPL. Waiting for bounce downs near the 8 week EMA for short entries.

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA (Support at 140/Resistance at 160), XRS, HA, HII, GGAL, AOS & STZ

Stocks identified by ** are holding up well and may be upside movers if the market strengthens.

Early Warning Alerts for Leveraged Index ETFs: Alert has reset, waiting for trigger.

I will trade UPRO or SPXL for the SPX, TNA for the RUT and TQQQ for the NDX. If a downside trade triggers I will trade SPXU, SQQQ or TZA.

 

 

 


 

February 10, 2016

Good Day Traders,

Earlier today I mentioned that one of our members had an issue with their broker who would not allow one of the Strategies. While this is an internal rule with the broker remember that each brokerage house has the right to modify what’s allowed to fit their parameters. If anyone does decide to switch to a more usable platform like TD Ameritrade and Think or Swim, call them before switching. If the dollar value of your account is certain size they may offer a monetary bonus to switch. Secondly negotiate your commission rate and ask for some free trades to switch.

Market Update: The Tracking Indexes continue to behave like a market in correction. The Indexes were mixed today with the NDX finishing up but with a weak candlestick. Prices gapped up on the NDX and then sold off to and finished near today’s lows.

On the daily chart of the S&P below we are seeing a classic Fibonacci retracement which could result in a round trip from the lows of 1/20 to the highs of 2/1. If the 1812 price level fails then the initial downside target is at the 138.2% retracement level. This is slightly above technical support at 1750. Given the tendency to overshoot if selling accelerates then the lower 161.8% retracement may be a stretch target the downside. If the NDX and COMP join the RUT in Bear Market Territory it will require a valiant effort by the S&P to hold up and not accelerate to the down side.

The Path of Least resistance remains down for now and the S&P could fall rapidly to catch up with the other Indexes. If there is a short trade on the SPY when SPX drops 1850 the stop loss would be moving back above today’s high. A more conservative trade would be to go short on another retest of the 8 or 20 day EMAs. The small bodied spinning top candles today mark indecision and hesitation. Will the current support hold and lead to a relief rally or will they fail and lead to more downside? We shall see.

SPX 2-10

Managing Existing Trades: Most of our gains this year have come from Strategy III. With the market volatility and lack of uniform pattern set ups having this secondary strategy to succeed because of the market volatility. Strategy III is like a covered call strategy but instead of owning the underlying stock or ETF we own a LEAPS option which allows me to control 100 shares of the entity for every contract owned. This is what allows me to sell weekly options each week. The strategy is not for everyone but it is worth learning and practicing in order to have another tool in the tool box.

Strategy I: No Open Trades

Strategy II: No Open Trades—if you trade options this is a good strategy to send up trial trades to see if the market’s direction may be changing. 1-5 contracts of one of the Index ETFs may provide less downside risk than long position in the underlying Index ETF. Trading options is not for everyone and I strongly encourage members to first become successful trading stocks and ETFs.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/


Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 17%

Closed partial position buying 2 SPY Feb2 184.5P at Stop Loss = 2.85
Loss = 1.31-2.85 = -1.54 or $154 per contract x 2 contracts = -$308

Closed partial position buying 2 SPY Feb2 194C at Stop Loss = 2.53
Loss = 1.02-2.53 = -1.51 or $151 per contract x 2 contracts = -$302

Total Loss for Week = -$308 – $302 = -$610

Sold 2 contract of SPY Feb2 189C at 1.2 worth $120 per contract

Looking for Next Week’s set up on the SPY

 

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 41%

Reported a bigger loss than expected after hours 2-10-16. Prices rebounded from the close and finally closed around $155. Implied Volatility will deflate from 243% quickly after the open. If pre-market prices stay approximately as the after-hour close then both weekly options will be almost worthless and both can be closed between a nickel and a dime.

Sold 1 contract of TSLA Feb2 115P at 2.72 worth $272 per contract
Will close after earnings at 0.05-0.10

Sold 1 contract of TSLA Feb2 177.5C at 2.43 worth $243 per contract
Will close after earnings at 0.05-0.10

Projected Weekly Profit = $515

Depending on tomorrow’s price action we may attempt to double dip and sell some more premium that will expire Friday. If the set up doesn’t happen I will look towards next week’s Weekly Options.

Several members have asked about this strategy and a more detailed explanation is available at: http://activetrendtrading.com/wealth-and-income-strategy/ .

I posted a video about how to choose the weekly options to short for this strategy. It can be viewed at: http://activetrendtrading.com/videos/

 

Pre-Earnings Trade: Currently in Q4 Earnings season. Pre-earnings candidates are stocks that tend to run prior to earnings between 5%-15%. We’ve seen a few stocks do a healthy pre-earnings run over the last week with an uptick in the Indexes. Remember this is a short term strategy aimed at capturing a portion of the pre-earnings run. We do not hold these positions over earnings! Holding through earnings can be risky just ask those who held on to AMZN! Potential candidates are: GGAL, HII and ANET.

Potential Set Ups for this week: Long set ups continue to be in short supply! Interesting that there were no Sector Leader stocks for IBD today! With the current market personality choosing one or two stocks and Index ETF’s is a good way to stay focused with potential short term trades for both Strategy I and Strategy II. I like TSLA and the Index ETFs for this focus currently and will look specifically for trades in each of these until the market’s personality changes.

Upside: Bases are being built but no early triggers.

Downside: NOW (big earnings gap down wait for set up), FB, SBUX, NFLX, AMZN, LNKD, NKE & AAPL. Waiting for bounce downs near the 8 week EMA for short entries.

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA, XRS, HA, HII, GGAL & STZ

Stocks identified by ** are holding up well and may be upside movers if the market strengthens.

Early Warning Alerts for Leveraged Index ETFs: Alert has reset, waiting for trigger

I will trade UPRO or SPXL for the SPX, TNA for the RUT and TQQQ for the NDX. If a downside trade triggers I will trade SPXU, SQQQ or TZA.

 


 

February 8, 2016

Good Day Active Trend Traders,

Market Update: As we said on the Friday “How to Make Money Trading Stocks” Webinar, the path of least resistance appeared to be down and that’s exactly what the Indexes provided today. The main question is will the lower support each Index found today hold or is it merely a stopping prior to a deeper plunge?

The weekly chart of the SPX shows where strong levels of support are located all the way down to the 1577.4 level which was the highs from the peak in 2007. A fall this deep would equate to a drop of 26% from last year’s and put the S&P in Bear Territory. Watch the support zone between 1800 and 1813. If this fails prices may stair step down deeper into this correction. With that said prices may also be approaching a rally zone if current support holds. Over the past two days prices have fallen away from the 8 and 20 week moving averages and are extended. With today’s bullish Hammer like signal may be the prerequisite for a bounce back to the mean. But remember the trend continues to be down and has not changed since November of last year.

SPX 2-8 Weekly

The fall on both the NDX and RUT is more severe than the S&P but both of these indexes are also approaching long term support. The NDX is down over 16% from the high of 2016 and the RUT is down 25.5%. For comparison the Nasdaq Composite is currently down over 18% from last year’s high just a whisper away from Bear Territory.


Managing Existing Trades: Most of our gains this year have come from Strategy III. With the market volatility and lack of uniform pattern set ups having this secondary strategy to succeed because of the market volatility. Strategy III is like a covered call strategy but instead of owning the underlying stock or ETF we own a LEAPS option which allows me to control 100 shares of the entity for every contract owned. This is what allows me to sell weekly options each week. The strategy is not for everyone but it is worth learning and practicing in order to have another tool in the tool box.

Strategy I: No Open Trades

Strategy II: No Open Trades—if you trade options this is a good strategy to send up trial trades to see if the market’s direction may be changing. 1-5 contracts of one of the Index ETFs may provide less downside risk than long position in the underlying Index ETF. Trading options is not for everyone and I strongly encourage members to first become successful trading stocks and ETFs.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

___________________________________________

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 17%

Closed partial position buying 2 SPY Feb2 184.5P at Stop Loss = 2.85
Loss = 1.31-2.85 = -1.54 or $154 per contract x 2 contracts = -$308

Closed partial position buying 2 SPY Feb2 194C at Stop Loss = 2.53
Loss = 1.02-2.53 = -1.51 or $151 per contract x 2 contracts = -$302

Total Loss for Week = -$308 – $302 = -$610

Will look for secondary trade this week.

 

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Currently Up 41%

Sold 1 contract of TSLA Feb2 115P at 2.72 worth $272 per contract

Will close after earnings or if my profit target between 0.20 – 0.50 is hit prior to earnings.

Sold 1 contract of TSLA Feb2 177.5C at 2.43 worth $243 per contract

Will close after earnings or if my profit target between 0.20 – 0.50 is hit prior to earnings.

Earnings on Feb 10th. Today Implied Volatility went over 200% making it an optimum time to open today’s positions. After earning the Implied Volatility will crunch immediately and go back to pre-earnings levels. If both positions are out of the money the premium will approach zero very quickly.

 

Several members have asked about this strategy and a more detailed explanation is available at: http://activetrendtrading.com/wealth-and-income-strategy/ .

I posted a video about how to choose the weekly options to short for this strategy. It can be viewed at: http://activetrendtrading.com/videos/

Pre-Earnings Trade: Currently in Q4 Earnings season. Pre-earnings candidates are stocks that tend to run prior to earnings between 5%-15%. We’ve seen a few stocks do a healthy pre-earnings run over the last week with an uptick in the Indexes. Remember this is a short term strategy aimed at capturing a portion of the pre-earnings run. We do not hold these positions over earnings! Holding through earnings can be risky just ask those who held on to AMZN! Potential candidates are: GGAL, HII and ANET**.

Potential Set Ups for this week: With leaders in the NDX selling off growth stock opportunities are few. Many growth stocks are basing but have not yet flashed early entry signals. Today’s sell off with mild rebound shows the unpredictability of the current market and long trades must be very, very compelling! Several of the stocks that looked to be shaping up for a strong bounce have failed. Portfolio building in Strategy I has not remained to favor but we will keep watching for those stocks that are holding up.

Upside: Bases are being built but no early triggers.

Downside: NOW (big earnings gap down wait for set up), NFLX, AMZN, LNKD, NKE & AAPL. Waiting for bounce downs near the 8 week EMA for short entries.

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA, ANET, HA**, STZ, XRS, ELLI, EW and SEDG**

Stocks identified by ** are holding up well and may be upside movers if the market strengthens.

Early Warning Alerts for Leveraged Index ETFs: Active Alert, waiting for entry trigger.

 

I will trade UPRO or SPXL for the SPX, TNA for the RUT and TQQQ for the NDX. If a downside trade triggers I will trade SPXU, SQQQ or TZA.

 


 

February 4, 2016

Good Day Active Trend Traders,

Market Update: Another day of indecision and mixed action on the Tracking Indexes. SPX down with NDX and RUT up but all three showing spinning top of doji candlesticks. The SPX is holding just above the 8 day EMA while the other two indexes are sitting just below this line of demarcation. This basically means that buyers and sellers finished in a tie for the day with neither having the momentum to push price action in a definite direction. This afternoon’s analysis of the market is basically a ditto of yesterdays.

As listed and shown below the S&P should provide action around the Buy or Sell Zones listed. Members can make similar list for both the NDX and RUT. The caveat I’ll add for each of the Indexes is with today’s price action being stagnant around the 8 day EMA this level could be used to plan either a up or downside trade then the zones would be targets.

Here the levels of interest on the indexes:

SPX— Strong Support at 1872 plan long trades here until it breaks
Strong Resistance at 1950 plan short trades here until it breaks

NDX— Strong Support at 4100
Strong Resistance at 4300

RUT— Strong Support at around 985
Strong Resistance at 1037

SPX 2-3

Managing Existing Trades: No open positions except foundation LEAPS for Strategy III.

Strategy I: No Open Trades

Strategy II: No Open Trades—if you trade options this is a good strategy to send up trial trades to see if the market’s direction may be changing. 1-5 contracts of one of the Index ETFs may provide less downside risk than long position in the underlying Index ETF. Trading options is not for everyone and I strongly encourage members to first become successful trading stocks and ETFs.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Gain of 10.65%

Closed partial position selling 2 SPY Feb1 193C at 0.25.
Profit = 1.88-0.25 = 1.63 or $163 per contract x 2 contracts = $326

Closed partial position selling 2 SPY Feb1 194C at 0.09.
Profit = 1.10 – 0.09 = 1.01 or $101 per contract x 2 contracts = $202

Total Profit for Week = $326+$202 = $528

 

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Gain of 23.03%

Closed partial position selling 1 TSLA Feb1 200C at 0.50.
Profit = 2.60 – 0.50 = 2.10 or $210 per contract x 1 contracts = $210

Earnings on Feb 10th AMC. I will hold off on opening the legs on TSLA until next week. During earnings week the Implied Volatility on TSLA goes through the rough. Waiting allows us to capture higher premiums with lower risk.

Plan to enter position on both Foundation position prior to the end of the week

Several members have asked about this strategy and a more detailed explanation is available at: http://activetrendtrading.com/wealth-and-income-strategy/ .

I posted a video about how to choose the weekly options to short for this strategy. It can be viewed at: http://activetrendtrading.com/videos/

Pre-Earnings Trade: Currently in Q4 Earnings season. Pre-earnings candidates are stock that tend to run prior to earnings between 5%-15%. We’ve seen a few stocks do a healthy pre-earnings run over the last week with an uptick in the Indexes. Remember this is a short term strategy aimed at capturing a portion of the pre-earnings run. We do not hold these positions over earnings! Holding through earnings can be risky just ask those who held on to AMZN! Potential candidates are: GGAL and ANET**.

LNKD is getting smoked in after hour trading down almost 30% from the close. This devastation will probably place LNKD on the short list moving forward.

Potential Set Ups for this week: With leaders in the NDX selling off growth stock opportunities are few. Some stocks are ramping up in preparation for earnings but even great earnings are not providing much protection.

Upside: CRI (off 8 week) & FB (watch pullback towards 107.75 or 110 and then rebound)

Downside: NOW (big earnings gap down wait for set up), NFLX, AMZN, LNKD & AAPL. Waiting for bounce downs near the 8 week EMA for short entries.

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA, ANET, HA**, NKE**, XRS, ELLI, EW and SEDG**

Stocks identified by ** are holding up well and may be upside movers if the market strengthens.

Early Warning Alerts for Leveraged Index ETFs: Active Alert, waiting for entry trigger.

I will trade UPRO or SPXL for the SPX, TNA for the RUT and TQQQ for the NDX. If a downside trade triggers I will trade SPXU, SQQQ or TZA.

 


 

February 3, 2016

Good Day Active Trend Traders,

Market Update: Very interesting market over the last three days! Evening Star Bearish reversal signal yesterday followed by a Bullish Hammer reversal candlestick pattern today on the daily charts. For the Tracking Indexes each started the day with what appeared to be a follow through to yesterday’s bearish formation only to find support and reverse higher. Each of the Indexes stopped on a dime at strong support as buyers came into the stocks in the indexes. Notice the price action on each Index today shows a long tail or wick which could be considered a positive for further upside. Add to this clue that volume picked up nicely as buyers showed up. The ranges on each Index was above average (an earmark of a volatile market). The SPX’s range was about 2.45% from low to high.

Here the levels of interest on the indexes:

SPX— Strong Support at 1872 plan long trades here until it breaks
Strong Resistance at 1950 plan short trades here until it breaks

NDX— Strong Support at 4100
Strong Resistance at 4300

RUT— Strong Support at around 985
Strong Resistance at 1037

Only the S&P finished above the 8 day EMA today so it earns the crown as the strongest of the 3 Tracking Charts. At this point I will use the levels defined above and place alerts at each. When price reaches these levels the appropriate trade can be executed if price stalls and shows signs of a reversal. See Buy & Sell Zones in the SPX daily chart below. Use the opposite level of support or resistance as a target. On the leveraged ETF’s this should equate to a move of around 12%. Also options on the non-leveraged Index ETFs can work in both directions. The daily chart below show zones of interest.

SPX 2-3


Managing Existing Trades: No open positions except foundation LEAPS for Strategy III.

Strategy I: No Open Trades

Strategy II: No Open Trades—if you trade options this is a good strategy to send up trial trades to see if the market’s direction may be changing. 1-5 contracts of one of the Index ETFs may provide less downside risk than long position in the underlying Index ETF. Trading options is not for everyone and I strongly encourage members to first become successful trading stocks and ETFs.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Gain of 10.65%

Closed partial position selling 2 SPY Feb1 193C at 0.25.
Profit = 1.88-0.25 = 1.63 or $163 per contract x 2 contracts = $326

Closed partial position selling 2 SPY Feb1 194C at 0.09.
Profit = 1.10 – 0.09 = 1.01 or $101 per contract x 2 contracts = $202

Total Profit for Week = $326+$202 = $528

 

Trade 2: Long TSLA Jan17 250C & Long Jan17 220—Current Trade—Gain of 23.03%

Closed partial position selling 1 TSLA Feb1 200C at 0.50.
Profit = 2.60 – 0.50 = 2.10 or $210 per contract x 1 contracts = $210

Earnings on Feb 10th.

Plan to enter position on both Foundation position prior to the end of the week

Several members have asked about this strategy and a more detailed explanation is available at: http://activetrendtrading.com/wealth-and-income-strategy/ .

I posted a video about how to choose the weekly options to short for this strategy. It can be viewed at: http://activetrendtrading.com/videos/

Pre-Earnings Trade: Currently in Q4 Earnings season. Pre-earnings candidates are stock that tend to run prior to earnings between 5%-15%. We’ve seen a few stocks do a healthy pre-earnings run over the last week with an uptick in the Indexes. Remember this is a short term strategy aimed at capturing a portion of the pre-earnings run. We do not hold these positions over earnings! Holding through earnings can be risky just ask those who held on to AMZN! Potential candidates are: GGAL and ANET**.

TTWO & SEDG reported after hours today and are gapping past resistance. LNKD reports AMC tomorrow.

Potential Set Ups for this week: With leaders in the NDX selling off growth stock opportunities are few. Some stocks are ramping up in preparation for earnings but even great earnings are not providing much protection.

Upside: CRI (off 8 week) & FB (watch pullback towards 107.75 or 110)

Downside: NOW (big earnings gap down wait for set up), NFLX, AMZN & AAPL. Waiting for bounce downs near the 8 week EMA for short entries.

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA, ANET, HA, NKE**, XRS, ELLI, EW, LNKD and SEDG** (Gapping above resistance after earnings 2/3)

Stocks identified by ** are holding up well and may be upside movers if the market strengthens.

Early Warning Alerts for Leveraged Index ETFs: Active Alert, waiting for entry trigger.

I will trade UPRO or SPXL for the SPX, TNA for the RUT and TQQQ for the NDX. If a downside trade triggers I will trade SPXU, SQQQ or TZA.

 

 

 


 

Feb 1, 2016

Good Day Active Trend Traders,

Market Update: Interesting price action today. The Indexes fell then rallied and then fell again, but finished up. The NDX was the only Index to finish above Friday’s close, with the S&P and Russell pulling back below their highs from Friday. Both the S&P and RUT finished the day with a Bearish Harami reversal pattern. Volume for each Index was below average.

The upward momentum from Friday’s large moved waned today with each Index appearing to stall out without moving strongly above Friday’s high. The S&P daily chart below shows that prices got close to strong resistance at 1950 and fell back. I would expect prices to stall out between current levels and the 1979 level. If price stall here then falling below the body of today’s candle could be the trigger for a downside trade. A downside trade would be less risky if there were several days of stalling at current levels and TSI crossing back over and into negative territory.

A long side trade would be a potential if price drop to the 8 day EMA or the bottom of the Fib Box and rebound. Remember the daily range on the SPX equated to a $2.74 range on the SPY. So identified support or resistance zones are the primary spots to plan trades in any of the Index ETFs, leveraged or non-leveraged.

SPX 2-1

Managing Existing Trades: Currently only managing the SPY & TSLA Calls for Strategy III.

Strategy I: No Open Trades

Strategy II: No Open Trades—if you trade options this is a good strategy to send up trial trades to see if the market’s direction may be changing. 1-5 contracts of one of the Index ETFs may provide less downside risk than long position in the underlying Index ETF. Trading options is not for everyone and I strongly encourage members to first become successful trading stocks and ETFs.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/


Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P.

Opened partial position selling 2 SPY Feb1 193C collecting a premium of $1.88; Potential Gross Revenue = $376
Opened partial position selling 2 SPY Feb1 194C collecting a premium of $1.10; Potential Gross Revenue = $220

Trade 2: Long TSLA Jan17 250C & Long Jan17 220

Opened partial position selling 1 TSLA Feb1 200C collecting a premium of $2.60; Potential Gross Revenue = $260

Earnings on Feb 10th.

Several members have asked about this strategy and a more detailed explanation is available at: http://activetrendtrading.com/wealth-and-income-strategy/ .

I posted a video about how to choose the weekly options to short for this strategy. It can be viewed at: http://activetrendtrading.com/videos/

Pre-Earnings Trade: Currently in Q4 Earnings season. Pre-earnings candidates are stock that tend to run prior to earnings between 5%-15%. We’ve seen a few stocks do a healthy pre-earnings run over the last week with an uptick in the Indexes. Remember this is a short term strategy aimed at capturing a portion of the pre-earnings run. We do not hold these positions over earnings! Holding through earnings can be risky just ask those who held on to AMZN! Potential candidates are: GGAL, TTWO, ANET and LNKD.

Potential Set Ups for this week: The follow-on reaction to GOOGL’s earnings may very well set the tone for the market this week. GOOGL provided a strong beat on both Q4 EPS & revenue. The immediate reaction was a jump of 9% from the close and then a sell off to just above the breakout level of $800. If this level fails tomorrow it may represent selling into this earnings report. This would be a clue of weakness that could translate to the rest of the market.

Upside: CRI (off 8 week) & FB (watch pullback towards 107.75 or 110)

Downside: NOW (big earnings gap down wait for set up), NFLX, AMZN & AAPL. Waiting for bounce downs near the 8 week EMA for short entries.

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA, ANET, HA, NKE, XRS, ELLI, EW, LNKD, IDTI and SEDG

Stocks identified by ** are holding up well and may be upside movers if the market strengthens.

Early Warning Alerts for Leveraged Index ETFs: Active Alert, waiting for entry trigger.

I will trade UPRO or SPXL for the SPX, TNA for the RUT and TQQQ for the NDX. If a downside trade triggers I will trade SPXU, SQQQ or TZA.

 


 

January 28, 2016

Good Day Active Trend Traders,

I recorded and posted a Getting Started in ATTS & EWA video on the website. If you are a new member to Active Trend Trading or Early Warning Alerts this video will provide a path to accelerate your learning.

Go Here: http://activetrendtrading.com/how-to-get-started/

Market Update: The Tracking Indexes were up today but stuck within the trading range of the past five days! Institutions are still digesting the Fed statement and it appears that most are still lighting their exposure to stocks on the rally attempts. On the SPX and RUT prices are consolidating sideways and the NDX has a downward bias that may worsen tomorrow due to Amazon missing earnings after hours. The headwinds that are against moving higher are certainly in play on the Indexes.

Today’s price action on each did not provide a decisive break but price on each of the indexes closed back below the 8 day EMA. The comments made on the S&P chart from yesterday are still valid so the same chart is provided today. On the S&P there is a support zone starting at the 1875 level followed by a cascade of potential support levels at 1850 and 1820ish. If futures tomorrow show a gap down below 1875 a retest of the lower support levels are in order. Unfortunately there is no proper entry trigger to short the ETF for the S&P.

The same story holds true for the other Indexes. Even the intraday charts are not showing proper entries during market hours due to the significant level of movement afterhours. This is the current market environment. The two major clues right now are that the relief rally started last week appears to be stalling. The second clue, as long as the weekly hammer is place a retest could lead to a stronger relief rally.

SPX 1-27

____________________________

Managing Existing Trades: Currently only managing the SPY Calls for Strategy III.

Strategy I: No Open Trades

Strategy II: No Open Trades—if you trade options this is a good strategy to send up trial trades to see if the market’s direction may be changing. 1-5 contracts of one of the Index ETFs may provide less downside risk than long position in the underlying Index ETF. Trading options is not for everyone and I strongly encourage members to first become successful trading stocks and ETFs.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

Strategy III Wealth & Income Generation Trades: I sent out the 2016 Update covering the benchmarks for how much weekly premium each of the two LEAP trades require to meet our 100% objective between now and January 20, 2017. If we achieve an average 75% of this target the Foundation LEAPS positions will be paid for plus a return of at least 50% will be achieved.

The weekly option trades for both SPY and TSLA have been going well this year. Since opening the long LEAPS position the SPY trade is up 12.42% and the TSLA trade is up 14.31%. There are 51 weeks prior to expiration of the LEAPS position. If we maintain the current average weekly return the SPY trade will achieve its objective of returning 100%. The TSLA trade needs to improve the weekly average closer to $326 per week!

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P. Total Capital Invested = 27.57 per Strangle or 27.57 x 400 = $11,028

Open Positions for the week ending 1/24 = Sold 4 contracts SPY Jan5 192.5C collected 1.22 in premium = $488 Gross Premium

Bought back 2 contracts at 0.18
Profit: 1.22 – 0.18 = 1.04 or for 2 contracts = $208
Remaining 2 contracts buy back at .05 for a potential gain of $234
Projected Weekly Profit= $442

 

Trade 2: Long TSLA Jan17 250C & Long Jan17 220P—Total Invested $9,010

Open Positions for the week ending 1/24 = Sold 1 contract TSLA Jan5 195P at 2.63; Sold 1 Contract TSLA Jan5 207.5C at 2.17

Combined= $480 Gross Premium

Stop Hit on Jan5 195P at 7.60 resulting in a loss of $4.97 or for the contract -$497
Bought back Jan5 207.5C at 0.65 resulting in a gain of 1.52 or $152
Net Loss for the week= -497 + 152 = -$345

Will look to open new weekly options by end of the week.

Several members have asked about this strategy and a more detailed explanation is available at: http://activetrendtrading.com/wealth-and-income-strategy/ .

I posted a video about how to choose the weekly options to short for this strategy. It can be viewed at: http://activetrendtrading.com/videos/

________________________________________

Potential Set Ups for this week: Three quarters of the FANGs have now report with only one surprising to the upside. That was FB today. GOOGL report’s AMC on Monday, February 1st. AMZN disappointed today and is down big afterhours. NFLX disappointed. Watch both AMZN and NFLX for potential downside trades. FB is on my list to buy at a proper entry point! If GOOGL disappoints next week could be a very interesting week!

Upside: STZ (off 8 week), CRI (off 8 week) & FB (big earnings gap up wait for set up)

Downside: NOW (big earnings gap down wait for set up), NFLX, AMZN & AAPL

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA, ANET, HA, NKE, XRS, ELLI and SEDG

Stocks identified by ** are holding up well and may be upside movers is the market strengthens.

Pre-Earnings Trade: Currently in Q4 Earnings season. Pre-earnings candidates are stocks that tend to run prior to earnings between 5%-15%. With the market correcting hard this special strategy may be less effective because of the headwind present for all stocks. Potential candidates are: GGAL, NOW, TTWO, ANET and LNKD.

Early Warning: Waiting for a secondary entry after Alert firing last week.

 

I will trade UPRO or SPXL for the SPX, TNA for the RUT and TQQQ for the NDX. If a downside trade triggers I will trade SPXU, SQQQ or TZA.


 

 

January 27, 2016

Good Day Active Trend Traders,

Market Update: The Fed spoke and the market dropped! It was somewhat humorous watching the talking heads on the business channels trying to explain the “why” behind the market spitting out the Fed’s offering. (BTW, I only watch the business channels on Fed day.) One commentator probably came closest to nailing it by saying that the Fed has lost all credibility with the Market. Thus the expectation is to disappoint! Was this a classic case of buy the rumor and sell the news? Who knows? What we do know is that on the SPX price range encompassed the range of the past three days and briefly reached the 38.2% retracement level as can be seen on the chart below. The results from the last four days provide us with few clues to the short term direction of the Indexes. The major clue to recognize is that the “go nowhere” price action of the past four days looks like stalling at a resistance level. The underlying weakness is potentially showing through.

The relief rally may be coming to an end and a retest of recent lows in the offing. If price action on the SPX drops below the 1870 level then prices will probably retest between the 1819 and 1850 levels. Will there be a potential downside trade set up? It depends on how price action breaks below the 1870 level. If prices gap below this level then entering a downside trade will be challenging. On the other hand if price move from above and then break this level that could provide an opportunity but a stop would be required moving back above this support/resistance level. I will be looking for intraday clues for a potential entry.

The NDX was off hard primarily due to AAPL’s earnings drop. This index line of demarcation is at 4100. A drop of this level increases the probability of testing the 4000 level. The 4000 level is a strong psychological level. If this is breached then 3800 is the next stop. Dropping 4000 will also void last week’s Hammer reversal signal the weekly chart.

The chart of the Russell looks similar to the S&P. Support around 1000. Any additional drop will bring last week’s low into play again.

On each of the Tracking Indexes a retest of around last week’s lows could put us in position for a stronger relief rally or a fall further into correction. If price action follows a path lower I’ll be looking for positive divergences on the momentum oscillators similar to the market behavior back in 2008.

SPX 1-27

__________________________________

Managing Existing Trades: Currently only managing the SPY Calls and TSLA Pu for Strategy III.

Strategy I: No Open Trades

Strategy II: No Open Trades—if you trade options this is a good strategy to send up trial trades to see if the market’s direction may be changing. 1-5 contracts of one of the Index ETFs may provide less downside risk than long position in the underlying Index ETF. Trading options is not for everyone and I strongly encourage members to first become successful trading stocks and ETFs.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

___________________________________________

Strategy III Wealth & Income Generation Trades: I sent out the 2016 Update covering the benchmarks for how much weekly premium each of the two LEAP trades require to meet our 100% objective between now and January 20, 2017. If we achieve an average 75% of this target the Foundation LEAPS positions will be paid for plus a return of at least 50% will be achieved.

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P. Total Capital Invested = 27.57 per Strangle or 27.57 x 400 = $11,028

Open Positions for the week ending 1/24 = Sold 4 contracts SPY Jan5 192.5C collected 1.22 in premium = $488 Gross Premium

Bought back 2 contracts at 0.18
Profit: 1.22 – 0.18 = 1.04 or for 2 contracts = $208
Remaining 2 contracts buy back at .05 for a potential gain of $234

 

Trade 2: Long TSLA Jan17 250C & Long Jan17 220P—Total Invested $9,010

Open Positions for the week ending 1/24 = Sold 1 contract TSLA Jan5 195P at 2.63; Sold 1 Contract TSLA Jan5 207.5C at 2.17

Combined= $480 Gross Premium

Stop Hit on Jan5 195P at 7.60 resulting in a loss of $4.97 or for the contract -$497
Bought back Jan5 207.5C at 0.65 resulting in a gain of 1.52 or $152
Net Loss for the week= -497 + 152 = -$345

Will look to open new weekly options by end of the week.

Several members have asked about this strategy and a more detailed explanation is available at: http://activetrendtrading.com/wealth-and-income-strategy/ .

I posted a video about how to choose the weekly options to short for this strategy. It can be viewed at: http://activetrendtrading.com/videos/

___________________________________

Potential Set Ups for this week: It will take a couple of days for the Fed non-decision to be digested by the institutions. The Indexes are still in a downtrend so we have our price levels of interest identified as prerequisites to action. Most of the stocks will follow the path of the Indexes

Here’s some observations. Facebook beat after-hours and is up nicely. Apple should no longer be considered a growth stock. NFLX looks like a great short candidate. Amazon’s earnings tomorrow AMC may set the tone for the remainder of the week.

Upside: STZ (off 8 week), CRI (off 8 week) & FB (big earnings gap up wait for set up)

Downside: NOW (big earnings gap down wait for set up), NFLX & AAPL

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA, ANET, HA, NKE, XRS, ELLI and SEDG

Stocks identified by ** are holding up well and may be upside movers is the market strengthens.

Pre-Earnings Trade: Currently in Q4 Earnings season. Pre-earnings candidates are stocks that tend to run prior to earnings between 5%-15%. With the market correcting hard this special strategy may be less effective because of the headwind present for all stocks. Potential candidates are: GGAL, NOW, TTWO, ANET and LNKD.

Early Warning: Waiting for a secondary entry after Alert firing last week.

I will trade UPRO or SPXL for the SPX, TNA for the RUT and TQQQ for the NDX. If a downside trade triggers I will trade SPXU, SQQQ or TZA.

 

 

 

 


January 25, 2016

Good Day Active Trend Traders,

Market Update: Ok its Fed week, we do not have to be in a hurry to trade until they report out unless there is a compelling reason! Today’s price action on the 3 Tracking Indexes showed lower volume with downside bias. As IBD said in today’s Big Picture, “Bullish technical setups are few and far between and the ones that do pop often are lacking key areas.” The SPX and NDX held up until just past midday and then sold off to the downside. The Russell retreated all day. Each of the Indexes gave up the 8 day EMA. This isn’t all bad as I spoke about in this weekend’s Trader’s Report. A pullback in to last Wednesday’s rally attempt and finding support would potentially provide a long side entry opportunity for a bounce. The headwind continues to be oil and this week’s Fed meeting.

Today the SPX erased the gains from Friday but in muted volume. The same can be said for both the NDX and RUT. Moving forward I will be looking for support clues between today’s close and the low from last Wednesday on each of the indexes. Even with today’s low volume sellers overpowered a portion of the current rally attempt. These repeating large range daily price ranges do not provide a solid entry signals due to the day-to-day volatility.

Over the next few days if the price action does pullback towards support and stops then we may nibble at a long side trade on the bounce. Just as I would look for stalling on a press upward into the Fib Box, I will look for stalling on a fall down between the 1825 and 1875 levels.

I will define the support levels on the NDX and RUT plans can be made for trading the Index ETFs for either of these entities. QQQ, TQQQ or SQQQ for the NDX which continues to provide higher upside probability than RUT.

SPX 1-25

__________________________________

Managing Existing Trades: Currently only managing the SPY Calls and TSLA Puts & Calls for Strategy III.

Strategy I: No Open Trades

Strategy II: No Open Trades—if you trade options this is a good strategy to send up trial trades to see if the market’s direction may be changing. 1-5 contracts of one of the Index ETFs may provide less downside risk than long position in the underlying Index ETF. Trading options is not for everyone and I strongly encourage members to first become successful trading stocks and ETFs.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

___________________________________________

Strategy III Wealth & Income Generation Trades: Two Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both SPY and TSLA to both pay for the capital invested and gain between 50% – 100%.

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P.
Last Week’s Net Profit: $494

Open Positions for the week ending 1/24 = Sold 4 contracts SPY Jan5 192.5C collected 1.22 in premium = $488 Gross Premium

Trade 2: Long TSLA Jan17 250C & Long Jan17 220
Last Week’s Net Profit: $229

Open Positions for the week ending 1/24 = Sold 1 contract TSLA Jan5 195P at 2.63; Sold 1 Contract TSLA Jan5 207.5C at 2.17
Combined= $480 Gross Premium

Will look to open new weekly options by end of the week.

Several members have asked about this strategy and a more detailed explanation is available at: http://activetrendtrading.com/wealth-and-income-strategy/ .

I posted a video about how to choose the weekly options to short for this strategy. It can be viewed at: http://activetrendtrading.com/videos/

Potential Set Ups for this week: Many of the stocks on my private watch list have followed the path of the market and put in a lower lows. Trading from a lower low with no consolidation or retest is a low probability trade and most of the time results in a pullback to retest around the support of the lower low. This retest is the signal we want to see and plan trades from. This may take a few days or more to work out which requires patience but the improved probability will make the wait worthwhile.

Upside: STZ, CRI & ELLI

Downside: NTES, AKRX & NFLX

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA, XRS, NKE, YY, SEDG & PLAB

Stocks identified by ** are holding up well and may be upside movers is the market strengthens.

Pre-Earnings Trade: Currently in Q4 Earnings season. Pre-earnings candidates are stock that tend to run prior to earnings between 5%-15%. With the market correcting hard this special strategy may be less effective because of the headwind present for all stocks. Potential candidates are: GGAL, NOW, TTWO, ANET and LNKD. Many other heavyweights’ report next week none of which are providing a pre-earnings run opportunity. These include AAPL, FB and AMZN.

Early Warning: Waiting for a secondary entry after Alert firing last week.

I will trade UPRO or SPXL for the SPX, TNA for the RUT and TQQQ for the NDX. If a downside trade triggers I will trade SPXU, SQQQ or TZA.

 


 

January 21, 2016

Good Day Active Trend Traders,

Market Update: The Tracking Indexes were mixed today. SPX and NDX up while the RUT was down. It’s not surprising that buyers are reluctant to jump back into the market with both feet considering that both of last week’s rally attempts were squashed! The rally attempt that started yesterday has survived but not provided a solid intraday entry trigger on any of the Indexes. In yesterday’s update I mentioned that a strong move up today would be suspect of just the beginning of a short lived “dead cat” bounce relief rally. A sounder rally would form if some consolidation took place with a retest into the wick of yesterday’s Hammer took place. Today meets part of the requirement for a sounder bounce but one day does not a sound consolidation make.

We must realize that since 12/30 the Indexes have experienced a significant amount of damage. Each of the Indexes is firmly entrenched in a downtrend which will require considerable repair to reverse. I still contend that the path of least resistance is down but at this point a brief rebound is likely. Last week’s attempted rebounds were short lived and last only a day or so. If this pattern of quick spurts up with hard reversals it would reveal even greater real and perceived market weakness. It would also show that institutional traders are using minor rebounds towards the moving averages as an opportunity to sell. Today price gains were on sharply lower volume which is not a sign of overall market health.

There are several positives for the day including how the Momentum Indicator on each of the Indexes moved up. Secondly today’s price action on two of the Indexes finished with another Bullish Reversal candlestick pattern. Both the SPX and RUT finished the day with a Bullish Harami. Both of these clues are pointing towards at least a relief rally. While candlestick reversal patterns provide clues as to where a reversal may happen they do not tell us how far the reversal may go. If there is a follow through on the SPX look for a bounce at least to the 1945-1950 resistance zone. This corresponds to the middle of the Fib Box highlighted yesterday. To enter a trade in either SPY or UPRO I would like to see a retest and rebound from around the 1850 level on the SPX. A gap up is less appealing for an entry because of overhead resistance from both the 8 and 20 day EMA’s and the Fib Box would come into play very quickly potentially limit upside potential.

___________________________________

Managing Existing Trades: Currently only managing the SPY Puts for Strategy III.

Strategy I: No Open Trades

Strategy II: No Open Trades—if you trade options this is a good strategy to send up trial trades to see if the market’s direction may be changing. 1-5 contracts of one of the Index ETFs may provide less downside risk than long position in the underlying Index ETF. Trading options is not for everyone and I strongly encourage members to first become successful trading stocks and ETFs.

For members wanting to better understand this Strategy there is a very good training video at: http://activetrendtrading.com/basic-option-strategy/

___________________________________________

Strategy III Wealth & Income Generation Trades: I sent out the 2016 Update covering the benchmarks for how much weekly premium each of the two LEAP trades require to meet our 100% objective between now and January 20, 2017. If we achieve an average 75% of this target the Foundation LEAPS positions will be paid for plus a return of at least 50% will be achieved.

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P. Total Capital Invested = 27.57 per Strangle or 27.57 x 400 = $11,028

Sold 4 contracts of SPY Jan4 181P for an average credit of 1.295

Stop loss at: 2.85

Order to buy back contracts between 0.05 – 0.10

Trade bought back 2 contracts of Jan4 181P at 0.10
Weekly Income Booked: $239.00

Order to buy back last 2 contracts for 0.05 in place
Estimated Remaining Weekly Income: $249

Projected Total Weekly Income: $488

Will look to open new weekly options by end of the week.

 

Trade 2: Long TSLA Jan17 250C & Long Jan17 220P—Total Invested $9,010

Sold 1 contracts of TSLA Jan4 195P for a credit of 3.04

Stop loss at: 7.94

Order to buy back contracts in place between 0.75 – 1.00

Trade closed when Jan4 195P was bought at 0.75
Weekly Income Booked: $229.00

Will look to open new weekly options by end of the week.

Several members have asked about this strategy and a more detailed explanation is available at: http://activetrendtrading.com/wealth-and-income-strategy/ .

I posted a video about how to choose the weekly options to short for this strategy. It can be viewed at: http://activetrendtrading.com/videos/

__________________________________________

Potential Set Ups: Diligence, Persistence and Patience, three words that are very relevant in the current market environment. I’m going to keep these three words front and center as the market continues to go through its current struggles.

The Indexes and many stocks are at a juncture where they will either build a base or wedge up to resistance and rollover for more downside. The challenging part of the current scenario is demonstrating the patience to wait for solid set-ups in either direction. To the long side I’m waiting moves back to the 8 day EMA and bounces. To the short side I’m waiting for moves back to the 8 day EMA and downside bounces.

Upside: NTES, XRS, & EBIX

Downside: NFLX & SBUX

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA, ELLI**, PANW, LNKD, ULTA, CALM, EPAM, ANET, NKE, TTWO, VLO, & SIG

Stocks identified by ** are holding up well and may be upside movers is the market strengthens.

Pre-Earnings: Pre-earnings candidates are stock that tend to run prior to earnings between 5%-15%. With the market correcting hard this special strategy may be less effective because of the headwind present for all stocks. NOW**, TTWO, AAPL & TSO

Early Warning: Waiting for a secondary entry after Alert firing last week.

I will trade UPRO or SPXL for the SPX, TNA for the RUT and TQQQ for the NDX. If a downside trade triggers I will trade SPXU, SQQQ or TZA.


 

January 20, 2016

Good Day Active Trend Traders,

Market Update: Just last week the two rally attempts were stopped in their tracks by more dramatic selling. Was today’s price action on the 3 Tracking Indexes a capitulation day or merely a rally attempt? Perhaps it is one in the same. The SPX and RUT both finished with Bullish Hammer Reversal candlesticks and the NDX finished with a long legged spinning top. Volume on each of the Indexes rose as buyers came into test the waters at today’s lows.

On the daily chart below we see that our two momentum oscillators are not totally in synch with the RSI providing a slight positive divergence while Momentum has yet to turn positive. Is today’s price action a reason to buy into a relief rally and if so when? Aggressive traders could have taken a trade today because Hammers are considered self-confirming signals. However a more prudent approach may be to wait to see if we get a retest into today’s lower wick to see if support at the zone around 1820 level holds and then trade from there. That is one of the challenge of trading large hammer. If a trader places a stop loss just below today’s low it would mean falling about 2.5% from the close on the SPX.

If the reversal confirms how far might prices run-up? The highlighted Fib Box which shows a retracement between 38.2% and 61.8% based on the high of 12/29/15 and today’s low is a target zone. From todays close to the bottom of the Box would be about 3% and to the top of the Box would be over 6%. I will use an intraday half-hour or 1-hour chart to time a potential entry if today’s hammer holds.

I will stick with my pecking order of SPX, NDX and RUT and trade the respective Leveraged ETF. If prices gap up into the Fib Box towards the 8, 20 or 50 day EMAs without providing some constructive consolidation I will view this as more of a “Dead Cat” bounce relief rally. In this scenario I will look for downside trade opportunities.

Another indicator that also provides a positive clue that this may be the start of at least a solid relief rally is VIX. VIX closed with a Shooting Star pattern on the daily chart after pushing above the 30 level. 0ver the past 2 years the VIX has only ventured above the 30 level a few times and each of these time led to positive market reversal. VIX goes in the inverse direction of the Indexes typically. We shall see if the same holds true this time.

SPX 1-20

_________________________________

Managing Existing Trades: Currently only managing the SPY Puts for Stategy III.

Strategy I: No Open Trades

Strategy II: No Open Trades—If you trade options this is a good strategy to send up trial trades to see if the market’s direction may be changing. 1-5 contracts of one of the Index ETFs may provide less downside risk than long position in the underlying Index ETF.

___________________________________________

Strategy III Wealth & Income Generation Trades: I sent out the 2016 Update covering the benchmarks for how much weekly premium each of the two LEAP trades require to meet our 100% objective between now and January 20, 2017. If we achieve an average 75% of this target the Foundation LEAPS positions will be paid for plus a return of at least 50% will be achieved.

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P. Total Capital Invested = 27.57 per Strangle or 27.57 x 400 = $11,028

Sold 4 contracts of SPY Jan4 181P for an average credit of 1.295
Stop loss at: 2.85
Order to buy back contracts between 0.05 – 0.10

Estimated Weekly Total: $478

Will look to open new weekly options tomorrow and Friday.

 

Trade 2: Long TSLA Jan17 250C & Long Jan17 220P—Total Invested $9,010

Sold 1 contracts of TSLA Jan4 195P for a credit of 3.04
Stop loss at: 7.94
Order to buy back contracts in place between 0.75 – 1.00

Trade closed when Jan4 195P was bought at 0.75
Weekly Income Booked: $229.00

Will look to open new weekly options tomorrow or Friday

Several members have asked about this strategy and a more detailed explanation is available at: http://activetrendtrading.com/wealth-and-income-strategy/ .

I posted a video about how to choose the weekly options to short for this strategy. It can be viewed at: http://activetrendtrading.com/videos/

_________________________________________

Potential Set Ups: Diligence, Persistence and Patience, three words that are very relevant in the current market environment. I’m going to keep these three words front and center as the market continues to go through its current struggles. Most stocks on my private list have shown a similar pattern to the indexes and rallied today from lower lows. Often the first rally off lower low results in stalling at past horizontal resistance formed by past lows or resistance at one of the downward sloping moving averages. There are very few quality growth stocks that haven’t plunged with the market below the 100 and 200 day moving averages.

Upside: IBD highlighted 3 growth stocks that could lead the market to a new uptrend. These include: ULTA, NTES & FB. I’ll add XRS an EBIX to the mix for potential rebounding leaders.

Downside: No Set Ups

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA, ELLI**, PANW, LNKD, AKRX, NKE, TTWO, VLO, & SIG

Stocks identified by ** are holding up well and may be upside movers is the market strengthens.

Pre-Earnings: Pre-earnings candidates are stock that tend to run prior to earnings between 5%-15%. With the market correcting hard this special strategy may be less effective because of the headwind present for all stocks. NOW**, TTWO, AAPL & TSO

Early Warning: Waiting for a secondary entry after Alert firing last week.

I will trade UPRO or SPXL for the SPX, TNA for the RUT and TQQQ for the NDX. If a downside trade triggers I will trade SPXU, SQQQ or TZA.


 

 

January 13, 2016

Good Day Active Rend Traders

Market Update: During uncertain times play small ball! This means build in extra capital protection by trading smaller position sizes. But still take the proper trade triggers based on the system. After a couple of trial trades don’t work step back and reassess. There may be more going on with the market and the complete tenor of the markets changed. This is where the market have left us to day.

After a brief 2 day rally attempt sellers re-seized control and pushed the selling deeper. Remember right now the “Weight of M“—the Market, is negative and not positive. We will see if buyers show up at established support level with enough momentum to both hold support and propel prices into a more sustained relief rally! Right now the sellers are winning the battle!

Officially the Russell entered Bear Market territory by finishing -22% below the highs from June 2015. While the other two Tracking Indexes have not yet dropped enough to reach Bear Territory today’s decline drove both below established support. Additionally the rally attempt that started three days ago has been voided along with the Bullish Reversal patterns.

We know that an attempted relief rally is due, but at this point there are few clues other than established support level to tell us where a bounce may take place and no clues telling us when.

The weekly SPX chart below provides a series of Stair Step support levels that could potentially provide support for bounce on the way down. The levels start at the 1866 level and then move 50-60 point falls all the way down to 1577 which represents the highs from 2007. The 2007 highs are only -16% away from today’s close. If prices continue to fall from today’s close the S&P would be in Bear Market Territory around 1700. This equates to an additional -10% drop. If the fall maintains the same downward velocity as the drop from the highs on 11/2 a drop of that magnitude could take place within the next 3 months or quicker. As with all market price moves a straight drop without some pauses to potentially bounce is not likely.

SPX wkly 1-13

Over the past 10 days the market has significantly changed character by accelerating to the downside. Daily price action is showing morning strength, opening up and then selling off. This is classic price action when a correction is underway. We would like to see a flag up to resistance to move into a short trade position in one of the Index ETFs, however the anemic rally attempt on Monday and Tuesday provide little opportunity to move into a downside position. At this point patiently waiting for a downside is the most prudent action.

____________________________________________________

Managing Existing Trades: Opened Put legs for Strategy III trades described below.

Strategy I: Opened a closed a position in HII this today. There was a solid entry trigger but price failed to bounce off the 8 day EMA as expected. I only took a one-half position as a way of mitigating risk. Total Loss = -$282.15

Since this is second trade in a row that provided a sound entry set up and then sold off to the stop loss in one day it is prudent to modify entry procedures and delay potential entries until later in the day when prices action has proved itself. If a long trade is still compelling then a trade may be in order. The alerts would come out during the day. Additionally with the market weakness downside trades or trades with the inverse Index ETFs are appropriate at proper entry points.

___________________________________________

Strategy II: No Open Trades—If you trade options this is a good strategy to send up trial trades to see if the market’s direction may be changing. 1-5 contracts of one of the Index ETFs may provide less downside risk than long position in the underlying Index ETF.

___________________________________________

Strategy III Wealth & Income Generation Trades: I sent out the 2016 Update covering the benchmarks for how much weekly premium each of the two LEAP trades require to meet our 100% objective between now and January 20, 2017. If we achieve an average 75% of this target the Foundation LEAPS positions will be paid for plus a return of at least 50% will be achieved.

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P. Total Capital Invested = 27.57 per Strangle or 27.57 x 400 = $11,028

Sold 4 contracts of SPY Jan16 186.5P for a credit of 0.77
Stop loss at: 2.32
Order to buy back contracts in place between 0.05 – 0.10
Estimated Weekly Income: $268

 

Trade 2: Long TSLA Jan17 250C & Long Jan17 220P—I will re-evaluate weekly premium objectives and send an email to Special Trade members with my new weekly objectives this week.

Sold 1 contracts of SPY Jan16 202.5P for a credit of 3.25
Stop loss at: 8.23
Order to buy back contracts in place between 0.75 – 1.00

Trade closed when Jan16 202.5P was bought at 0.83
Weekly Income: $249.50

Several members have asked about this strategy and a more detailed explanation is available at: http://activetrendtrading.com/wealth-and-income-strategy/ .

I posted a video about how to choose the weekly options to short for this strategy. It can be viewed at: http://activetrendtrading.com/videos/

 

Potential Set Ups: Remember that 65-75% of stocks move in the direction of the prevailing market trend. The current trend is down so a trade must be very compelling to go against the current market trend. Today’s action on the Indexes counts as a rally attempt so if there are stocks showing compelling strength a potential trade may be in order. Compelling means the stock held up better than the Indexes as the market fell and is setting up for an ATTS entry. Don’t be fooled by a sucker’s set up on the first move up from a new low after price has dropped the 50 day EMA on higher volume. The success rate of this set up is low.

Secondly, with the significant sell-off underway some sort of capitulation to the downside would increase the probability of a tradable relief rally. This action has not taken place yet. The capitulation would take the form a large sell off and rebound bounce much like we saw in August 2015 or October 2014.

I’m adding the inverse leveraged Index ETF’s into the “On the Radar” list. They are not ready for a trade right now but may provide opportunities after a relief rally. As the market volatility increases adding additional focus on the Index ETFs may provide short term trading opportunities of less than 5 days. I know some members are unable to trade these quick swing trades so if that the case standing by in cash is a solid stance.

Upside: No triggers ready

Downside: EPAM, HII & AMBA

On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA, TSLA, ELLI, PANW, LNKD, AKRX, NKE, TTWO, VLO, SIG & XRS**

Pre-Earnings: Pre-earnings candidates are stock that tend to run prior to earnings between 5%-15%. With the market correcting hard this special strategy may be less effective because of the headwind present for all stocks. NOW, AAPL & TSO

Early Warning: Waiting for a secondary entry after Alert firing last week.

I will trade UPRO or SPXL for the SPX, TNA for the RUT and TQQQ for the NDX.

 


 

January 11, 2016

Good Day Active Trend Traders,

Market Update: If the headlines in various financial news feeds like WSJ, IBD, Yahoo Finance and the like are any indication, someone is expecting further downside and perhaps a Bear Market. Even some of the most bullish sources are admitting that many of the stocks in the various indexes are already languishing in a “Bear Market”. Isn’t interesting that Mike and I have been pointing this fact out with greater emphasis over the past 60 days! Typically the timing of headlines such as these coincide with when the market bounces after a prolonged drop into either a relief rally or Bull Trap. The question we ask is the bounce tradable or does it make sense to simply wait for the flag up to a downside entry?

The good news about today’s price action is that each of the Tracking Indexes dropped and then rebounded from strong support zones. Both the SPX and NDX finished with candlestick reversal patterns on the daily charts and RUT finished with a spinning top at support. The SPX put in a hammer like doji that is also a Bullish Harami. The NDX finished with a more classical hammer that is also a Bullish Harami. Today’s price action on the NDX and SPX can be counted as a rally attempt.

Is it worth trying to trade the relief Rally? To answer this question the Fib Retracement Box was added to the chart below that defines the zone covered by a 38.2 x 61.8% retracement from high of 12/29 through today’s low. From today’s close up to the 38.2% retracement reflects a positive 2.5% move. If prices ran all the way to the top of the Fib Box at the 61.8% retracement level this would reflect a 4.5% move. While a move of that magnitude would be worth a trade using either options or the leveraged Index ETF for the SPX, will the trade set up?

Ideally I would like to see prices tomorrow start a little below today’s close and then move up and through today’s small candle body. However a gap up closer to the lower edge of the Fib Box would be too close to resistance for a trading the gap. What is the most likely upside target? The 50% retracement provides a resistance zone where resistance from the low of 12/14 converges forming strong resistance. Recognize that the above scenario would only reflect a Relief Rally in what appears to be a market correction that may have claws. So tight stops and tight profit projection are in order.

SPX 1-11

____________________________________________________

Managing Existing Trades: Established the SPY LEAPS foundational position for 2016. All Strategy III foundation positions are in place for the year.

Strategy I: No Open Positions

___________________________________________

Strategy II: No Open Trades—If you trade options this is a good strategy to send up trial trades to see if the market’s direction may be changing. 1-5 contracts of one of the Index ETFs may provide less downside risk than long position in the underlying Index ETF.

___________________________________________

Strategy III Wealth & Income Generation Trades: I sent out the 2016 Update covering the benchmarks for how much weekly premium each of the two LEAP trades require to meet our 100% objective between now and January 20, 2017. If we achieve an average 75% of this target the Foundation LEAPS positions will be paid for plus a return of at least 50% will be achieved.

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P. Total Capital Invested = 27.57 per Strangle or 27.57 x 400 = $11,028

Sold 4 contracts of SPY Jan16 186.5P for a credit of 0.77
Stop loss at: 2.32
Order to buy back contracts in place between 0.05 – 0.10
Estimated Weekly Income: $268

 

Trade 2: Long TSLA Jan17 250C & Long Jan17 220P—I will re-evaluate weekly premium objectives and send an email to Special Trade members with my new weekly objectives this week.

Sold 1 contracts of SPY Jan16 202.5P for a credit of 3.25
Stop loss at: 8.23
Order to buy back contracts in place between 0.75 – 1.00
Estimated Weekly Income: $225

 

Several members have asked about this strategy and a more detailed explanation is available at: http://activetrendtrading.com/wealth-and-income-strategy/ .

I posted a video about how to choose the weekly options to short for this strategy. It can be viewed at: http://activetrendtrading.com/videos/

________________________________

Potential Set Ups for this week: Remember that 65-75% of stocks move in the direction of the prevailing market trend. The current trend is down so a trade must be very compelling to go against the current market trend. Today’s action on the Indexes counts as a rally attempt so if there are stocks showing compelling strength a potential trade may be in order. Compelling means the stock held up better than the Indexes as the market fell and is setting up for an ATTS entry. Don’t be fooled by a sucker’s set up on the first move up from a new low after price has dropped the 50 day EMA on higher volume. The success rate of this set up is low.

Several stocks are forming consolidation patterns but none are providing a convergence of clues for a proper set up.

Upside: No triggers ready

Downside: NFLX, EPAM & AMBA

On the Radar: Stocks that could go either way include: TSLA, ELLI, PANW, LNKD, AKRX, HII**, NKE, TTWO, VLO, SIG & XRS**

Pre-Earnings: NOW, AAPL & TSO

Early Warning: Waiting for a secondary entry after Alert firing last week.

I will trade UPRO or SPXL for the SPX, TNA for the RUT and TQQQ for the NDX.

 


 

January 7, 2016

Good Day Traders,

Market Update: The S&P has dropped 7 of the last 9 days and today overshot a strong support zone. I included last night’s chart as reference of where price would most probably stop. This morning after the “crisis du jour” on the Shanghai Index provided the catalyst markets around the world reacted as the sun started continued its westward journey. Price action did not stop where it was most probable an each identified support was violated. Prices on the S&P have now closed below the long term uptrend line and done so with increased velocity. At the close SPX finished at the top of a lower trading range running from 1940 down to the 1870 level. This trading range reflects a strong level of support and anywhere within this range buyers can potentially show up for a relief rally.

Daily action closed yesterday as very oversold and extended from the moving average means. At the close of today’s market prices are even more oversold and more extended. Clues that a relief rally is in the offing continue present themselves but even when the clues are most promising price can continue to move against the clues—thus the old adage, “just because it’s oversold doesn’t mean it can’t become more oversold.”

Barring any overnight surprise from the Asian markets today’s support may hold and provide a toehold to start moving back up towards the moving averages on the SPX and the other Tracking Indexes. A bounce at this juncture will be considered a tradable relief rally.

SPX 1-7-16

SPX 1-6-16

Of the other two Tracking Indexes the NDX is at strong support represented by a zone between 4100 and 4300. The RUT is flirting with levels not visited since October 2014. On both indexes a bounce from these significant support zones is compelling. I’ll be watching ATTS reversal signals.

____________________________________________________

Managing Existing Trades: Established the SPY LEAPS foundational position for 2016. All Strategy III foundation positions are in place for the year.

Strategy I: No Open Positions

___________________________________________

Strategy II: No Open Trades

___________________________________________

Strategy III Wealth & Income Generation Trades: This week I’ll be setting up the Index ETF Straddle for Trade 1 of this Strategy. For the TSLA position I’ll recalculate the weekly premium objective for the year and post this to members who are following these special trades. Watch for the email defining income objectives for 2016 by Friday, 1/8.

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P. Total Capital Invested = 27.57 per Strangle or 27.57 x 400 = $11,02

Trade 2: Long TSLA Jan17 250C & Long Jan17 220P—I will re-evaluate weekly premium objectives and send an email to Special Trade members with my new weekly objectives this week.

 

Several members have asked about this strategy and a more detailed explanation is available at: http://activetrendtrading.com/wealth-and-income-strategy/ .

I posted a video about how to choose the weekly options to short for this strategy. It can be viewed at: http://activetrendtrading.com/videos/

 

Potential Set Ups for this week: The story for today’s Market Update Report remains the same as it has been all week! Weakening markets can be challenging to trade especially if our mindset tells us it’s the beginning of the year and I have to build my Strategy 1 Portfolio positions right now! Currently market price action is not supporting this—so don’t force it. So patiently waiting for proper set up and triggers in each strategy is key to succeeding in 2016.

With the currently market growing in volatility and weakness adjusting our buying mechanics to initial positions only 25% of expected share size is a prudent action if proper buy triggers appear.

We do not need a Strategy 1 trade every week for success. We just need to act on the proper trades at the proper time. The system took us to “Cash” about 2 weeks ago and now we’re waiting for buying opportunities. They will show up. Strategy III provides a market presence for growth and cash flow while the clues reveal themselves.

Upside: HII & TSO

Downside: NOW, NOAH, AVGO, FB, AAPL & EPAM

On the Radar: AKRX, NKE, YY, LNKD, EW & ICLR

Pre-Earnings: Will wait for 4th quarter earnings reports starting in 2016.

Early Warning: Long UPRO and TNA. Trade details are sent directly to Early Warning members for specific trade management. Our 2015 system analysis will be available shortly and will be posted to the performance section of the ATTS website.

I will trade UPRO or SPXL for the SPX, TNA for the RUT and TQQQ for the NDX.



 

January 6, 2016

Good Day Traders,

Market Update: Third day of the 2016 trading year and more downside movement! Today the pre-market news that the North Koreans are testing Nukes dampened the spirits of buyers. Add this bit of news to the Chinese economy issues, the Saudi’s defriending the Iranians, crumby profits expectation, the President shedding elephant tears on national television, the FED, and an election year—what possibly could go wrong and drive the market into purge mode? The truth will work its way out in the charts so be vigilant. In a lot of ways I’m seeing much of what’s going on as ingredients for a perfect storm. This will eventually spit out some great long term opportunities over a 3-9 month timeframe. In the interim there will be profitable trading spurts like the one that maybe setting up currently.

Oh BTW—China’s stock trading was halted during Thursday’s trading session as the yuan devalued once more. This is the second day out of 4 that trading was halted! Has anyone else heard the rumor that Chinese Government restriction on shorting Chinese stocks was being lifted on Jan 8th? If this is true we’ll see that reaction Thursday night! Like I said early, “What could go wrong?”

The Tracking Indexes are each showing signs of reaching for a support level that will sustain at least a relief rally. The SPX, NDX and RUT are each doing an excellent job of working with well-defined boundary zones of support and resistance. The symmetry of current price action on the longer term weekly and monthly charts is playing out well with potential setups appearing on the shorter term daily and intraday charts. In other words established levels of support and resistance are defining where traders will be looking for potential short term trades.

Focusing on this daily chart of SPX some potential reversal clues to standout. Here are a few to consider:

  1. Price action reaching levels of support defined by multiple clues. Strong support between 1960-1980
  2. Near Lows of a down trending trading range
  3. Over extended below 20 day & 50 day EMA.
  4. Longer lower wicks on the daily candlesticks showing buyers showing up to push prices off daily lows
  5. Momentum Indicators reaching levels where past bounces began

Must these clues lead to an immediate reversal? No not at all. When price action is showing weakness like that currently being demonstrated on the SPX there can be a series of head fakes where positive clues are voided with further downside. If the velocity of the downside accelerates provides a strong clue that the sellers are much stronger that buyers initial attempt to reverse the trend. So my stance for trading any of the index ETF’s to be ready for a bounce trade. But recognize the bounce may take place from a much deeper level of support.

SPX 1-6-16

Similar clues are showing on the NDX and RUT. I like how SPX’s price action patterns are showing order moving to expected levels without a lot of volatility. Because of this current characteristic the SPX ETF’s would be my first choice to trade. I would follow this up with RUT and then NDX based on today’s market review.


Managing Existing Trades: Established the SPY LEAPS foundational position for 2016. All Strategy III foundation positions are in place for the year.

Strategy I: No Open Positions

___________________________________________

Strategy II: No Open Trades

___________________________________________

Strategy III Wealth & Income Generation Trades: This week I’ll be setting up the Index ETF Straddle for Trade 1 of this Strategy. For the TSLA position I’ll recalculate the weekly premium objective for the year and post this to members who are following these special trades. Watch for the email defining income objectives for 2016 by Friday, 1/8.

Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P. Total Capital Invested = 27.57 per Strangle or 27.57 x 400 = $11,028

Trade 2: Long TSLA Jan17 250C & Long Jan17 220P—I will re-evaluate weekly premium objectives and send an email to Special Trade members with my new weekly objectives this week.

 

Several members have asked about this strategy and a more detailed explanation is available at: http://activetrendtrading.com/wealth-and-income-strategy/ .

I posted a video about how to choose the weekly options to short for this strategy. It can be viewed at: http://activetrendtrading.com/videos/

 

Potential Set Ups for this week: Weakening markets can be challenging to trade especially if our mindset tells us it’s the beginning of the year and I want to build my Strategy 1 Portfolio positions when the market price action is not currently supporting that strategy. So patiently waiting for proper set up and triggers in each strategy is key to succeeding in 2016. With the currently market growing in volatility and weakness adjusting our buying mechanics to initial positions only 25% of expected share size is a prudent action if proper buy triggers appear.

We do not need a Strategy 1 trade every week for success. We just need to act on the proper trades at the proper time. The system took us to “Cash” about 2 weeks ago and now we’re waiting for buying opportunities. They will show up. Strategy III provides a market presence for growth and cash flow while the clues reveal themselves.

Upside: HII & TSO

Downside: NOW, NOAH, AVGO & EPAM

On the Radar: AKRX, NKE, YY, LNKD, EW & ICLR

Pre-Earnings: Will wait for 4th quarter earnings reports starting in 2016.

Early Warning: On Standby.

 

I will trade UPRO or SPXL for the SPX, TNA for the RUT and TQQQ for the NDX.

 


 

 

January 4, 2016

Good Day Traders,

From August through December 2015 our training session clearly focused how to use the 8 day EMA for triggering entries which led to some solid gains to finish the year. The key for 2016 is to continue using the mechanics of the Active Trend Trading System for planning and position development. I’ll be posting more information about performance for 2015 during the week. I’m pleased that Active Trend Trading System posted a double digit return for the fourth year in a row with an average yearly return of 29%.

For those anxious to start trading right out of the gate this New Year I encourage you to make a commitment with your trading account to be more patient in 2016. Review the training webinars from the last three months on how to trade the 8. One of my early trading mentors would always remind me if I was over anxious that it is wasted energy. He would say, “The best trade of the year comes around about every 2-3 weeks!”

____________________

Market Update: “Happy New Year’s Traders, welcome to 2016 and Oh BTW—Watch that first step!” Piling into doing an observations regarding the first trading day of 2016 one thing is clear—today’s price action was merely a continuation of momentum that started 3 trading days ago. Today’s price action on all three Tracking Indexes reflects a solid sell-off down to one support zones identified in this weekend’s Trader’s Report. Now will prices consolidate for a tradable quick tradable rally on the Tracking Indexes? We shall see.

As discussed in yesterday’s Trading Report I’m looking for clues of market health based on how price action behaves as the Indexes move within the long term top visible on each. How will the established trading ranges be modified and adjusted as price on the Indexes begin tipping over the edge and take aim on retracing to October’s lows? On the SPX the daily and weekly Momentum Indicators appear to favor more downside. The big positive for the SPX that favors at least brief bounce is holding support at 1990 but any rally would be suspect of flaming out around the now downward facing 50 day EMA. Be aware that on the SPY a Bullish Daily Hammer is in place. The SPX daily candle is positive but not a reversal candle.

The Nasdaq 100 continues to move sideways in a slightly downward sloping channel. Price gapped down and only made a feeble bounce attempt. Daily price action finished with a Hammer. Momentum continues to fall off on both daily and weekly charts. Like the S&P price may rattle around within existing ranges as the New Year’s market outlook becomes clearer.

The Russell “dropped and fizzled” today holding support at 1100. September’s low is only 2.74% below today’s close and 2014’s low down an additional 3%. If support at 1043 fails look a downside target between the 800-900 levels would not be surprising. Technically the RUT is showing the greatest level a weakness with strong potential of visiting price levels from 2012.

Trading for each of the Index ETF’s plan trades off support or resistance. If you want to trade to the downside either trade Put options on the Index ETF’s or Inverse Index ETF’s. If trading the Inverse Index ETF’s (non-leveraged or leveraged) keeping trade period very short. The inverse entities are very volatile and due to the type trading instruments needed to emulate the inverse action tend to lose value longer term. I never hold an inverse Index ETF longer than 30-60 days!


Managing Existing Trades: Established the SPY LEAPS foundational position for 2016. All Strategy III foundation positions are in place for the year.

Strategy I: No Open Positions

___________________________________________

Strategy II: No Open Trades

___________________________________________

Strategy III Wealth & Income Generation Trades: This week I’ll be setting up the Index ETF Straddle for Trade 1 of this Strategy. For the TSLA position I’ll recalculate the weekly premium objective for the year and post this to members who are following these special trades.

Trade 1: Issued alert that I was buying the Jan17 205C and a Jan17 200P Strangle at a limit of 27.55 x 27.65 and was filled at 27.57—This SPY Strangle will be my foundation position to sell weekly premium against over the next 54.5 weeks.

I used a tight bid/ask spread to enter this position and depending on many variables members following this trade may not have filled. When market makers start to see action in a specific strike price and strike month will widen the gap between the Bid/Ask so a trader must pay up to get in. Currently the Bid/Ask Spread on this Strangle is 27.43 x 27.75 with a mid-mark of 27.59

 

Trade 2: Long TSLA Jan17 250C & Long Jan17 220P—I will re-evaluate weekly premium objectives and send an email to Special Trade members with my new weekly objectives this week.

 

Several members have asked about this strategy and a more detailed explanation is available at: http://activetrendtrading.com/wealth-and-income-strategy/ .

I posted a video about how to choose the weekly options to short for this strategy. It can be viewed at: http://activetrendtrading.com/videos/


Potential Set Ups for this week: Weakening markets can be challenging to trade especially if our mindset tells us it’s the beginning of the year and I want to build my Strategy 1 Portfolio positions when the market price action is not currently supporting that strategy. So patiently waiting for proper set up and triggers in each strategy is key to succeeding in 2016.

We do not need a Strategy 1 trade every week for success. We just need to act on the proper trades at the proper time. The system took us to “Cash” about 2 weeks ago and now we’re waiting for buying opportunities. They will show up. Strategy III provides a market presence for growth and cash flow while the clues reveal themselves.

Upside: AKRX

Downside: NFLX (Weakening fundamentals)

On the Radar: PLAY, AHS, AVGO, BABA, & IDTI

Pre-Earnings: Will wait for 4th quarter earnings reports starting in 2016.

Early Warning: Waiting for new alert.

I will trade UPRO or SPXL for the SPX, TNA for the RUT and TQQQ for the NDX.

 


 

December 28, 2015

Good Day Traders,

Market Update: The three Tracking Indexes followed a pattern of selling off to support and then rebounding today. The SPX and NDX put in hammer like candlesticks but not at the end of a long downtrend. This is not a real strong reversal signal but may guide price action into some upward momentum through the rest of the week. The SPX rebounded from a moving average cluster including the 8, 20 and 50 day EMA’s. The Nasdaq 100 rebounded nicely from the 50 day and closed above both the 8 and 20 day EMA’s. The RUT is still showing it’s lagging nature and rebounded but not with as much gusto.

If the Indexes rally from current levels the move may be short lived as strong levels of resistance may thwart any significant moves. As I stated on Saturday’s Webinar, over the past 65 years the market has finished with a gain during the last week of trading for the year 78% of the time. This does leave a 22% probability that the Indexes could finish unchanged or below last Thursday’s close. With the market acting suspect it is prudent to reduce position sizes if there is a compelling set up on either the Index ETFs or a leading stock.


Managing Existing Trades: We will begin tracking our trades and outcomes by strategy in 2016. My primary focus will be on Strategy 1, and I will continue to trade the other two strategies because of their potential for either capital growth or income generation.

Strategy I: No Open Positions

___________________________________________

Strategy II: No Open Trades

___________________________________________

Wealth & Income Generation Strategy III Trades: I have close the long Jan 2016 IWM position. I plan to open a new base position with either the Jan 2017 IWM or SPY LEAPS.

Trade 1: Waiting for the first week in January.

Trade 2: Long TSLA Jan17 250C & Long Jan17 220P – Short 1 TSLA Dec5 227.5P at 2.85, I will close this position between 0.50 and 1.00


Highlight Stocks: I like NKE for a long position with a proper set-up. This may be a super performer in 2016 due to the Olympics. To the short side NFLX has not broken down yet, but it’s fundamentals are starting to turn ugly.

Remember I’m position sizing for 4-5 position on $70K in trading capital or $140K at full margin. Each trader must position size to match their own risk profile!

Upside Candidates: NKE, AOS & AHS

On the Radar: TSLA, AVGO, PANW, EPAM, YY, NOW, HAWK, CRM, AKRX, ELLI, WAL, GGAL & VEEV

Downside: NFLX & AAPL

Pre-Earnings: Will wait for 4th quarter earnings reports starting in 2016.

Early Warning: Opened one position in TNA and did not fill on the position in UPRO. 45 shares remaining with a gain of 7.05% on this portion. 40 shares closed last Thursday for a 10% gain.

I will trade UPRO or SPXL for the SPX, TNA for the RUT and TQQQ for the NDX.


 

 

December 23, 2015

Good Day Traders,

We made it back from Arkansas late last night. Mom is safely in her new residence. A true blessing to be able to focus our efforts over the past week on making sure she is set up well. Learned something very important, for those of us getting to that stage of life with adult children downsize before reaching you late 80’s. It will be easier on your kids and yourself!

Market Update: Today’s market action was healthy with the typical holiday upward bias. If anyone opened a trade based off of Monday’s Bullish Harami then have a plan to take some profit off the table between today’s close and the swing high from 12/17. All three of the Tracking Indexes finished three nice up days with the S&P and Nasdaq 100 showing more strength than the RUT. Tomorrow will be a short day and the Markets will close at 1 p.m. EST.

Since I’m currently flat the market (all in cash for Strategy 1) I will stay on the sidelines tomorrow and then spend time on Saturday going over stock picks to potentially finish out the year with. I will be monitoring the market tomorrow and if there is a big up day take some profits off the table for the Early Warning Alert open trade.

On all three indexes the daily charts are looking positive for a drive at least to old resistance levels based on momentum oscillators starting to move up. Even the weekly charts are showing some positive action as the SPX and NDX TSI is bouncing from the “zero” line. I don’t put too much credence in the current action as it appears we are in the typical yearend Santa Claus Rally. There will be a bit more shuffling about next week as institutions make the final adjustments to their portfolios for the final quarter of the year. This is typically window dressing and not the substance of a sustained move higher.

____________________________

Managing Existing Trades: We will begin tracking our trades and outcomes by strategy in 2016. Open trades for Strategy 1 will show up on the daily market update in a spreadsheet. The spreadsheet show several things including current position size, gain/loss, stop loss and several other pieces of information we will use to manage the portfolio positions. While my primary focus will be on Strategy 1, I will maintain the other strategies and provide separate performance sheets on them also.

Strategy I: The system took us out of our last long position earlier this week. Since I was travelling and unable to provide the level of analysis I have held off on entering any new trades.

___________________________________________

Strategy II: No Open Trades

___________________________________________

Wealth & Income Generation Strategy III Trades: I have close the long Jan 2016 IWM position. I plan to open a new base position with either the Jan 2017 IWM or SPY LEAPS.

Trade 1: Long IWM Jan16 127C & 127P – This long position a demonstration trade is now closed. I will wait until after the Fed Announcement next week to open a new long foundation using 2017 LEAPS in SPY.

Trade 1: Long TSLA Jan17 250C & Long Jan17 220P – Look for set up tomorrow on weekly options expiring next week.

Highlight Stocks: Remember I’m position sizing for 4-5 position on $70K in trading capital or $140K at full margin. Each trader must position size to match their own risk profile!

Upside Candidates: NOAH & PAYC

On the Radar: TSLA, NFLX, AMBA, PANW, HAWK, CBM, AHS & ANET

Downside: SWKS, AAPL & TSO

Pre-Earnings: Will wait for 4th quarter earnings reports starting in 2016.

Early Warning: Opened one position in TNA and did not fill on the position in UPRO. With the immediate market weakness shown today we may be in for a wild ride. Some members may want to tighten their stops to breakeven and plan to exit with profits between 8-10%.

I will trade UPRO or SPXL for the SPX, TNA for the RUT and TQQQ for the NDX.


 

December 17, 2015

Good Day Traders,

Market Update: I was away from the market moving my mom in to an assisted care apartment. From the looks of the price action I’m glad the ATT System currently has me in less than a fully invested position even though from an IBD perspective the market is back in a confirmed uptrend!

All three Tracking Indexes showed bearish reversal candle patterns on their daily charts showing that the current uptrend could be short lived or just a weak spring forward. The SPX and NDX showed bearish engulfing patterns with the RUT flashing a dark cloud. If you happen to be long on any of the Tracking Indexes violating today’s low would be a confirmation of today’s bearish signal.

With the Fed following through with the rate increase it may take a few days for the act and the verbiage of the decision to digest through the market. At this point no action is prudent action as the digestion process continues. Today’s action was somewhat confusing to many analyst. Predictions going into 2016 run the gamut from 10% upside to a full blown Bear Market. Our objective is to let the system take us into the market when it’s time and take us out for protection—also at the right time.

___________________

Managing Existing Trades: We will begin tracking our trades and outcomes by strategy in 2016. Open trades for Strategy I will show up on the daily market update in a spreadsheet. The spreadsheet show several things including current position size, gain/loss, stop loss and several other pieces of information we will use to manage the portfolio positions. Here’s a snapshot of part of this tracking tool with current trades. The full spreadsheet will be viewable on the website version of the Daily Update. We will cover this spreadsheet at the Wednesday evening training. Copies will be made available to members to track their own trades.

Strategy I: Currently 2 open. Both CBM and HAWK continued to hang tough in the current market environment. We currently own ½ a position in both CBM and HAWK. Building them to full position may be a prudent course of action if they continue to hold up in this market when they start to show a bit more strength. Both are showing good resilience which may be rewarded if the market moves back into a rally soon.

Trade 1: Entered CBM on a pullback to the 8 day EMA on 11/19. Hard Stop has been moved to breakeven or 49.40. Sold ½ the position when T1 = 54.34 was triggered on 11/25. Closed 175 shares at 54.30 for a profit of $857.50
On 12/9 entered another 175 shares at 51.76.
Current position up: 1.3%

Trade 2: Entered HAWK at 47.10 on 12/3 on a bounce from the 8 day EMA. T1 = 10% above entry at 51.81 and the Hard Stop is at 45.22.
Current position down: -0.3%

___________________________________________

Strategy II: No Open Trades

___________________________________________

Wealth & Income Generation Strategy III Trades: I have close the long Jan 2016 IWM position. I plan to open a new base position with either the Jan 2017 IWM or SPY LEAPS.

Trade 1: Long IWM Jan16 127C & 127P – This long position a demonstration trade is now closed. I will wait until after the Fed Announcement next week to open a new long foundation using 2017 LEAPS in SPY.

Trade 2: Long TSLA Jan17 250C & Long Jan17 220P – Wait for trade now that the Fed is behind us.

Highlight Stocks: I’m looking to add to the HAWK and CBM positions but strength has not come back into either stock at this time. At times when the markets are showing a lot of volatility watching the 8 week EMA for potential trades is good headwork. We can trade off the 8 week EMA just like we would trade off the 8 day EMA but expect a bigger move up from the stronger weekly EMA.

Remember I’m position sizing for 4-5 position on $70K in trading capital or $140K at full margin. Each trader must position size to match their own risk profile!

Upside Candidates: CBM, NOAH and HAWK

On the Radar: TSLA, HA, IMAX, LNKD, PANW, YY, AMBA, NFLX, EBIX & NOAH

Downside: JAZZ, V, SWKS, AAPL & TSO

Pre-Earnings: Will wait for 4th quarter earnings reports starting in 2016.

Early Warning: Opened one position in TNA and did not fill on the position in UPRO. With the immediate market weakness shown today we may be in for a wild ride. Some members may want to tighten their stops to breakeven

I will trade UPRO or SPXL for the SPX, TNA for the RUT and TQQQ for the NDX.

 

 


 

December 14, 2015

Good Day Traders,

Market Update: Two members of the Tracking Index rebounded from a morning sell-off and finished in positive territory for the day! The Russell didn’t. While the price action on both the NDX and SPX qualify candlestick reversal pattern holding off to enter any long positions until after the Fed reports is the most prudent approach. The opinions of what the market may do regardless of the Fed decision is all of the chart. We can guess the posturing will continue through tomorrow and into Wednesday. Then the digestion will take place over Thursday and Friday. The significant increase in volatility into and after the Fed was front page news on some of the financial sites.

If we do venture into any of the index ETF’s leveraged or non-leveraged it will be with a reduced number of shares. Potential profit or loss will be muted regardless of what happens with the Fed.

Overview: A few members have asked question about how a Bear Market might impact the ATTS Strategy 1. Would we trade to the downside? How would expected returns be impacted? Well the two following tables provides a snap shot of how well the first IBD 100 list did in the last Bear Market which started in 2007 and ended in 2008. I track the first IBD 50 (it was the IBD 100 in 2007-2008) each year to see how that universe of stocks would have done from the close of the previous year to the end of the tracking year; from the close to the first major high of the year; and from the first major low of the year to the next major high of the year.

The first table covers 2007 and the middle section period from the Major Low to the next Major High. This point is highlighted by the arrow. From the major low of the year to the next major high, 77 out 100 stocks on this IBD 100 list beat the S&P for the same measurement. The average move was 78.95% compared to the S&Ps 15.55% move from its major low. What this tells us it that even after a move lower there were a significant number of opportunities to enter high quality growth stocks even in a weakening market.

IBD 2007

The next table covers the heart of the Bear Market in 2008. Zoning in on the same move from major low to next major high shows that 95 out of 100 stocks on the 2008 IBD 100 did better than the S&P which was up a very respectable 24%. The point with both these examples is that even in a Bear Market there will be significant tradable rallies for those patient enough to wait for the system to give the all clear to trade and start building a new portfolio.

Ibd 2008

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Managing Existing Trades: We will begin tracking our trades and outcomes by strategy in 2016. Open trades for Strategy I will show up on the daily market update in a spreadsheet. The spreadsheet show several things including current position size, gain/loss, stop loss and several other pieces of information we will use to manage the portfolio positions. Here’s a snapshot of part of this tracking tool with current trades. The full spreadsheet will be viewable on the website version of the Daily Update. We will cover this spreadsheet at the Wednesday evening training. Copies will be made available to members to track their own trades.

Strategy I: Currently, 2 open trades after NOW hit the stops today as it succumbed to the early morning sell off. Both CBM and HAWK continued to hang tough in the current market environment. We currently own ½ a position in both CBM and HAWK so building them to full position may be a prudent course of action if they continue to hold up in this market. Both are showing good resilience which may be rewarded if the market moves back into a rally soon.

Trade 1: Entered CBM on a pullback to the 8 day EMA on 11/19. Hard Stop has been moved to breakeven or 49.40. Sold ½ the position when T1 = 54.34 was triggered on 11/25. On 12/9 entered another 175 shares at 51.76. Closed 175 shares at 54.30 for a profit of $857.50
Current position up: 1.4%

Trade 2: Entered NOW at 86.55 today on a bounce from the 8 day EMA on 11/30. T1 = 10% above entry at 95.21 and the Hard Stop is at 83.09. Stopped out at 83.09 on 12/14.
Position Closed for 4% Loss

Trade 3: Entered HAWK at 47.10 on 12/3 on a bounce from the 8 day EMA. T1 = 10% above entry at 51.81 and the Hard Stop is at 45.22.
Current position down: -0.7%

___________________________________________

Strategy II: No Open Trades

___________________________________________

Wealth & Income Generation Strategy III Trades: I will close the long Jan 2016 IWM position prior to the end of the year and open a new base position with the Jan 2017 IWM or SPY LEAPS.

Trade 1: Long IWM Jan16 127C & 127P – This long position a demonstration trade is now closed. I will wait until after the Fed Announcement next week to open a new long foundation using 2017 LEAPS in SPY.

Trade 2: Long TSLA Jan17 250C & Long Jan17 220P – Wait for trade after Fed Announcement uncertainty is over.

___________________________________________

Highlight Stocks: I’m very pleased with how following the ATTS rules is moving me more into cash as the market corrects. This will assure we’ll be ready for the next buying opportunities. Several of the “On the Radar” stocks are resetting below the 8 day EMA and may base a bit more as they complete their pullbacks.

Remember I’m position sizing for 4-5 position on $70K in trading capital or $140K at full margin. Each trader must position size to match their own risk profile!

Upside Candidates: CBM (Hammer 12/14) and HAWK

On the Radar: TSLA, HA, IMAX, LNKD, PANW, YY, AMBA, NFLX, & NOAH

Downside: JAZZ, V & TSO

Pre-Earnings: Will wait for 4th quarter earnings reports starting in 2016.

Early Warning: Standby Alert Issued. I will lean more towards UPRO and TQQQ due to the negative aspect of an interest rate hike on the Small Cap Russell.

I will trade UPRO or SPXL for the SPX, TNA for the RUT and TQQQ for the NDX.

 


December 10, 2015

Good Day Traders,

Market Update: Someone made an interesting comment yesterday about the current market action. They said, “what if the downside action was a reaction to the Fed Announcement and after the news hits, it could be off to the races!” I recognize that comments made on any price action East of today’s close is merely an opinion or speculation, this comment at least piqued my thought process. Could current market posturing simply be getting ready for the Fed? Sure and each time prior to the Fed meeting the market’s action is different.

At this point it would take a very compelling reason to take a long term position in any of the 3 Tracking Indexes before the Fed Meeting. On the S&P the 8 and 20 day EMA’s have provided a negative cross which acted as resistance on today’s price range. But the candlestick pattern for the day was an Inverted Hammer, which by definition is a positive reversal signal. A lesson for candlestick reversal patterns is that occasionally a candle signal will flash a signal but price doesn’t reverse. The signal is voided but it leaves a clue. That reversal pattern may indicate where buyers or sellers first make their appearance felt in the current trend. This is valuable information for traders because that first clue is often followed by another reversal pattern days or weeks later and the trend reverses with more momentum.

NDX finished below the 8 and 20 day EMA’s and formed a bullish Harami. Price action is posturing between support at the 4600 level just above the 50 day EMA and a resistance zone at the 8 and 20 day just below stronger resistance beginning at the 4700 level.

The Russell is hanging out just above strong support at the 1140 level. The past three day show an example of multiple reversal candles. Tuesday’s candle was a Hammer which was voided by yesterday’s price action. Today’s price action is an Inverted Hammer like candle. With these clues this index may want to reverse course soon. Positive reversal signals at support that may become compelling.

___________________________________

Managing Existing Trades: We will begin tracking our trades and outcomes by strategy in 2016. Open trades for Strategy I will show up on the daily market update in a spreadsheet. The spreadsheet show several things including current position size, gain/loss, stop loss and several other pieces of information we will use to manage the portfolio positions. Here’s a snapshot of part of this tracking tool with current trades. The full spreadsheet will be viewable on the website version of the Daily Update. We will cover this spreadsheet at the Wednesday evening training. Copies will be made available to members to track their own trades.

ATTS Portfolio Full 12-10

Strategy I: Currently 5 open trades. As the snapshot of the tracker shows I have filled slots for 5 stocks and still have $63.9K in buying power to be 100% invested. At this point I’m not pyramiding into full margin positions until we cover the mechanics of pyramiding in a training session.

Trade 1: Entered CBM on a pullback to the 8 day EMA on 11/19. Hard Stop has been moved to breakeven or 49.40. Sold ½ the position when T1 = 54.34 was triggered on 11/25. On 12/9 entered another 175 shares at 51.76. Closed 175 shares at 54.30 for a profit of $857.50
Current position up: 2.9%

Trade 2: Entered NOW at 86.55 today on a bounce from the 8 day EMA on 11/30. T1 = 10% above entry at 95.21 and the Hard Stop is at 83.09.
Current position up: 0.4%

Trade 3: Entered HAWK at 47.10 on 12/3 on a bounce from the 8 day EMA. T1 = 10% above entry at 51.81 and the Hard Stop is at 45.22.
Current position down: -1.6%

Trade 4: Entered CRM at 35.32 on 12/10 on a bounce from the 8 day EMA. T1 = 10% above entry at 88.72 and the Hard Stop is at 77.43
Current position down: -1.6%

Trade 5: Entered AKRX at 80.66 on 12/8 on a bounce from the 8 day EMA. T1 = 10% above entry at 38.85 and the Hard Stop is at 33.91
Current position up: 0.6%

___________________________________________

Strategy II: No Open Trades

___________________________________________

Wealth & Income Generation Strategy III Trades: I will close the long Jan 2016 IWM position prior to the end of the year and open a new base position with the Jan 2017 IWM or SPY LEAPS.

Trade 1: Long IWM Jan16 127C & 127P – This long position a demonstration trade is now closed. I will wait until after the Fed Announcement next week to open a new long foundation using 2017 LEAPS in SPY. Total Profit this Trade $299 or 3%

Trade 2: Long TSLA Jan17 250C & Long Jan17 220P – It appears that prices are stacked to advance. I’m looking to sell the TSLA Dec15 220P for one side tomorrow depending on the intraday chart.

___________________________________________

Highlight Stocks: With the portfolio portion of Strategy I full with 5 stocks it makes the searching for candidates less of a challenge because now attention can turn to managing the portfolio. I will continue to provide candidates daily of high quality IBD Growth stocks so I’m ready in case one of the stocks in the portfolio stops working!

Remember I’m position sizing for 4-5 position on $70K in trading capital or $140K at full margin. Each trader must position size to match their own risk profile!

Upside Candidates: CBM (I would be looking to add to make a full position once we train on pyramiding) & TSLA (Poor fundamentals but very good technical chart for trades both directions, may be a good short term call option trade).

On the Radar: NOAH, BABA, BIDU, & EPAM

Downside: MBLY, PAYC, & FIT

Pre-Earnings: Will wait for 4th quarter earnings in 2016.

Early Warning: Standby Alert Issued.

I will trade UPRO or SPXL for the SPX, TNA for the RUT and TQQQ for the NDX.

 


 

December 8, 2015

Good Day Traders,

Market Update: The Tracking Index finished mixed today. NDX up, with SPX and RUT down. Each still moving within an established trading range, thus making little progress while waiting for the Fed. While most financial institution believe the probability of a Fed hike next week at this point it doesn’t appear anyone is putting money behind that conviction.

Support between the 100 and 50 day moving averages held today as both the 8 and 20 day EMA’s continue to rollover to the downside. I do not want to read too much into the 8 and 20 day EMA’s action due because current price action is reacting more like a pullback that a selloff. The expected range of the next few days is between 2043 and 2100.

NDX responded a bit better today closing in the black and above the 8 day EMA. The uptrend is intact but strong resistance is checking upside progress at the 4737 level. Like the SPX there is no call to action while price action remains in “no man’s” land.

The Russell is interesting because today’s price action finished with a Hammer. This bullish candlestick reversal pattern shows a zone where buyers are coming in and providing support. Over the past several weeks the Russell has shown some very uniform and shapely price action between support at 1140 and resistance zone at 1200. This is the type of action that can be traded. If the low of today’s candle holds a retest this may be a trigger for a long side trade in either IWM or TNA. I will be monitoring tomorrow’s futures for insight into what to expect.

____________________________

Managing Existing Trades: We will begin tracking our trades and outcomes by strategy in 2016. Open trades for Strategy I will show up on the daily market update in a spreadsheet. The spreadsheet show several things including current position size and several other pieces of information we will use to manage the portfolio positions. Here’s a snapshot of part of this tracking tool. The full spreadsheet will be viewable on the website version of the Daily Update. We will cover this spreadsheet at the Wednesday evening training. Copies will be made available to members to track their own trades.

ATTS Portfolio Full

Strategy I: Currently 4 open trades. As the snapshot of the tracker shows I can buy one additional full share of a stock to fill the portfolio based on a $70K margin account. I would like to also buy additional shares of CBM to fill out that position. At this point I’m not pyramiding into full margin positions until we cover the mechanics of pyramiding in a training session.

Trade 1: Entered CBM on a pullback to the 8 day EMA on 11/19. Hard Stop has been moved to breakeven or 49.40. Sold ½ the position when T1 = 54.34 was triggered on 11/25. Closed 175 shares at 54.30 for a profit of $857.50
Current position up: 2.51%

Trade 2: Entered NOW at 86.55 today on a bounce from the 8 day EMA on 11/30. T1 = 10% above entry at 95.21 and the Hard Stop is at 83.09.
Current position up: 4.7%

Trade 3: Entered HAWK at 47.10 on 12/3 on a bounce from the 8 day EMA. T1 = 10% above entry at 51.81 and the Hard Stop is at 45.22.
Current position up: 0.4%

Trade 4: Entered CRM at 80.66 on 12/8 on a bounce from the 8 day EMA. T1 = 10% above entry at 88.72 and the Hard Stop is at 77.43
Current position up: 0.5%

____________________________
Strategy II: No Open Trades

____________________________

Wealth & Income Generation Strategy III Trades: I will close the long Jan 2016 IWM position prior to the end of the year and open a new base position with the Jan 2017 IWM or SPY LEAPS.

Trade 1: Long IWM Jan16 127C & 127P – Sold 5 contracts of IWM Dec2 116P at 0.78. I will place a stop at 0.70 above 0.78 and buy back the position at between 0.05 and 0.30.

Trade 2: Long TSLA Jan17 250C & Long Jan17 220P – Sold 1 contract of TSLA Dec2 225P for a credit of $3.30 or $330. Stop place 1.6 above $3.30 and will buy the position back at between 0.25 and 1.00

____________________________

Highlight Stocks: Most of the stocks on the Watch List will follow the Market’s lead. If the Indexes just mush around until after the Fed we can expect the same from 65%-75% of stocks.

Remember I’m position sizing for 4-5 position on $70K in trading capital or $140K at full margin. Each trader must position size to match their own risk profile!

Upside Candidates: CBM (also watching the 8 week EMA), AKRX & BABA

On the Radar: TSLA (Poor fundamentals but very good technical chart for trades both directions), NOAH, NFLX, PANW, DATA, LNKD, EPAM, & YY

Downside: MBLY, PAYC, & FIT

Pre-Earnings: 3rd Quarter earnings are just about over with a few stocks reporting during the first few weeks in December. Potential trades include: CALM, RHT & NKE.

Early Warning: Waiting for a new signal.

I will trade UPRO or SPXL for the SPX, TNA for the RUT and TQQQ for the NDX.


December 7, 2015

Good Day Traders,

Today is the Seventy-fourth anniversary of the Japanese attack on Pearl Harbor. Most of the men and women who served alongside those who perished that day have been reunited with their shipmates! Today we remember! Rest in peace shipmates! May your sacrifice be forever remembered and may enough remember to always fight those who would destroy this great nation!

Market Update: Well today could have been a lot worse! Two of the tracking indexes fell deep into Friday price range before finding support for an afternoon rebound. The Russell broke support and fell further towards support at the 1140 level. What will tomorrow bring? Probably more of the same because each of the Indexes may be content whipping between existing support and resistance until after the Fed announcement next week.

As I said in the weekend’s trader’s report, because the indexes are in this trading range wait until support to go long and resistance to trade to the downside. Right now we’re in no-man’s land.

It’s a positive for the day that buyers did come in on the S&P and Nasdaq 100. Notice how the S&P found support at the 8 week EMA and at least weakly bounced. It is a tossup on which way price action goes from here. If sellers rule then expect a visit to the 2043 level. The NDX was a bit stronger than the other two members of the Tracking Index. Price action respected the 8 day EMA and the uptrend is intact. At this point I’m placing an alert just above the 8 week EMA on the NDX to signal if prices fall to that level. I will look for clues that buyers are coming into support that level. This is my chosen line of demarcation for the NDX.

As mentioned above look for stronger support on the RUT at the 1140 level. If things turn real ugly the Russell is the best candidate for a big move down.

If the Indexes follow last year’s pattern we may see a swing low around December 15th followed by a two week Santa Claus rally. Check the weekly charts and each of the Indexes provided a bounce from support of the 20 week moving average in December 2014.

_________________________

Managing Existing Trades: Going into next year I will be pyramiding into full position in Strategy I. We will cover this in the Wednesday training session through the end of December before I begin executing pyramiding in the order alerts. As with all new concepts training is provided before it is introduced into the System.

Strategy I: Currently 3 open trades. I’m looking for two new positions to fill out the portfolio. If CBM strengthens taking another position could fill one of these two openings. We’re looking for stocks and Index ETFs that will work for us going into the end of the year.

Trade 1: Entered CBM on a pullback to the 8 day EMA on 11/19. Hard Stop has been moved to breakeven or 49.40. Sold ½ the position when T1 = 54.34 was triggered on 11/25. Closed 175 shares at 54.30 for a profit of $857.50
Current position up: 2.51%

Trade 2: Entered NOW at 86.55 today on a bounce from the 8 day EMA on 11/30. T1 = 10% above entry at 95.21 and the Hard Stop is at 83.09.
Current position up: 1.65%

Trade 3: Entered HAWK at 47.10 on 12/3 on a bounce from the 8 day EMA. T1 = 10% above entry at 51.81 and the Hard Stop is at 45.22.
Current position down: -0.25%

_________________________

Strategy II: No Open Trades

_________________________

Wealth & Income Generation Strategy III Trades: I will close the long Jan 2016 IWM position prior to the end of the year and open a new base position with the Jan 2017 IWM or SPY LEAPS.

Trade 1: Long IWM Jan16 127C & 127P – Sold 5 contracts of IWM Dec2 116P at 0.78. I will place a stop at 0.70 above 0.78 and buy back the position at between 0.05 and 0.30.

Trade 2: Long TSLA Jan17 250C & Long Jan17 220P – Sold 1 contract of TSLA Dec2 225P for a credit of $3.30 or $330. Stop place 1.6 above $3.30 and will buy the position back at between 0.25 and 1.00

Highlight Stocks: Most of the stocks on the Watch List will follow the Market’s lead. If the Indexes just mush around until after the Fed we can expect the same from 65%-75% of stocks.

Remember I’m position sizing for 4-5 position on $70K in trading capital or $140K at full margin. Each trader must position size to match their own risk profile!

_________________________

Upside Candidates: CBM (also watching the 8 week EMA), AKRX and CRM (placed order just before the close, if price holds the 8 day EMA could be an entry trigger).

On the Radar: TSLA (Poor fundamentals but very good technical chart for trades both directions), NOAH, NFLX, PANW, DATA, LNKD, HAWK, EPAM, YY, & NOW

Downside: MBLY, AFSI & FIT

Pre-Earnings: 3rd Quarter earnings are just about over with a few stocks reporting during the first few weeks in December. Potential trades include: CALM, RHT & NKE.

Early Warning: Waiting for a new signal.

I will trade UPRO or SPXL for the SPX, TNA for the RUT and TQQQ for the NDX.


December 3, 2015

Good Day Traders,

Market Update: How far will the Tracking Indexes fall? Will today’s action lead to a Santa Claus Rally? Why does Europe need stimulus and the USA needs a rate hike? We could drive ourselves nuts trying to answer the “WHY”! This is why technical analysis is such a great tool for traders. We just need the chart and don’t need to know why. When we see a chart like todays where selling accelerated we know that something happened to bring seller to the forefront. We also know that the stampede stopped at an established level of support but no reversal signal is in place yet.

The S&P hit the 8 day and dropped to support at the 2046 level which is close to the 50 and 100 day moving averages. Buyers did not come in to rescue the day, just stop the bleeding for a bit. Volatility increased and Momentum decreased perfect combo for a sell off. From the daily momentum oscillators it appears that there may be a few more days of downside so watch for support at the 2025 level. The slide could continue through the Fed report next Tuesday.

The NASDAQ 100 held above the 50 day but is showing similar weakness as the S&P. Wait for the clues to reveal when an upside reversal may take place. The daily big moves up and then big moves down are not the clues we are looking for.

The RUT found temporary support at 1169 but closed below all moving averages. It also looks primed for a fall t at least the 1140 level. I would look for a downside trade on a retrace into the middle third of today’s candlestick if price reverses with vigor. A move to 1140 on the RUT equates to a move down to 114 on the IWM. This is a little over $2 to the downside from current levels.

_____________________________________

Managing Existing Trades: The system worked well today in getting us out of trades that were not working well any longer. FB was not working so I pulled the plug rather than take the full 4% loss. NOAH gave us a good profit a couple of weeks ago but also started weakening and close out breakeven on the last half of the shares opened. Additionally we see with the current trades when the TSI is down and starting up we tend to get a more robust move on the stock. Currently we have the TSI up and rolling over. This is a good time to wait!

Strategy I: Currently 4 open trades.

Trade 1: Entered NOAH on today’s pullback to the 8 day EMA. Sold ½ of the position at T1= 33.22 taking $755 in profit off the table. NOAH it the breakeven target for the last half of the trade today and closed on market weakness. Total Profit for this total trade: $755

Trade 2: Entered CBM on today’s pullback to the 8 day EMA. Hard Stop is placed at 4% below purchase price at 47.42. Sold ½ the position when T1 = 54.34 was triggered on 11/25. Closed 175 shares at 54.30 for a profit of $857.50
Current position up: 2.61%

Trade 3: Entered FB at 106.30 on 11/25 on a break above the 8 day EMA. At this point FB has not gotten in gear and may be a weak member of the portfolio. This would make FB the first stock to cut if a stronger candidate is identified. The action in FB today show why. Price bounced up and through and then drew back. T1 = 10% above entry at 116.93 and a Hard Stop placed as a conditional market order at 102.04. The FB trade wasn’t working so rather that hang for the fall of 4% closed the position today at 103.71 for a 2.4% loss. Total loss = $336.70

Trade 4: Entered NOW at 86.55 today on a bounce from the 8 day EMA on 11/30. T1 = 10% above entry at 95.21 and the Hard Stop is at 83.09.
Current position up: 1.78%

Trade 5: Entered HAWK at 47.10 on 12/3 on a bounce from the 8 day EMA. T1 = 10% above entry at 51.81 and the Hard Stop is at 45.22.
Current position down: -2.08%

Strategy II: No Open Trades

 

Wealth & Income Generation Strategy III Trades: I like how the enhanced stop loss set up is working with the Strategy III trades. While no one likes to get stopped out of any trade keeping the losses to less than a week’s worth of average income has solve the issue of losing several weeks of booked profits when a trade goes against us.

Trade 1: Long IWM Jan16 127C & 127P – Bought back all 7 contracts of Dec1 120.5C, 4 contracts at 15 cents and 3 contracts at 5 cents. Net Income cleared for the week = $240

Trade 2: Long TSLA Jan17 250C & Long Jan17 220P – Waiting Set Up

_____________________________________

 

Highlight Stocks: When the market dumps like it did today the majority of stocks go with the flow. I’ll be looking for candidates that held up or actually bucked the market in the high quality IBD stock inventory.

Remember I’m position sizing for 4-5 position on $70K in trading capital or $140K at full margin. Each trader must position size to match their own risk profile!

Upside Candidates: None for tomorrow based on tonight’s review

On the Radar: TSLA, PANW, HAWK, EPAM, YY, NOW, CRM, EBIX, AKRX**, XRS and AHS

Downside Candidates: FIT, MBLY & AFSI

Pre-Earnings: PLAY

 

Early Warning: Waiting for a new signal.

I will trade UPRO or SPXL for the SPX, TNA for the RUT and TQQQ for the NDX.

 


 

December 1, 2015

Good Day Traders,

Market Update: Again each of the Tracking Indexes shrugged off and voided a daily Bearish Reversal signal the following day. This has been common place action over the past couple of months as the meandering uptrend continues. The S&P closed above resistance at 2100 and appears to be in gear to move at least back to the highs of the year. Price is back above the 8 day EMA so this can be used as a trigger for potential long trades, but keep the stops tight!

NDX pushed above the breakout level of 4694 and also appears to be ready for new high ground. Same idea for using the 8 day EMA as a trigger for long trades in either QQQ, TQQQ or a QQQ January Call option.

The RUT retook the 1200 level and looks to be on a collision course with the 200 day moving average at 1213. The Russell continues to make up ground on the other 2 Tracking Indexes. On a weekly chart price is extended from the moving averages so slowing at some point in the near future would not be a surprise. On the weekly chart the moving averages are starting to turn up so the Russell may have some positive upside through the rest of 2015 if it gets past the Fed meeting next week.

__________________________________________

Managing Existing Trades: Through the end of 2015 I will be building a 4-5 portfolio positions for Strategy I. The back testing for the mechanics of holding until there is a longer term exit are ongoing and appears to be a great enhancement for Strategy I. The mechanics of the process will increase clarity and simplicity for our members. Once the portfolio is full our work will focus on managing the 4-5 open positions using conditional orders with established ATTS rules. Members should find the mechanics straight forward and objective.

Strategy I: Currently 4 open trades.

Trade 1: Entered NOAH on today’s pullback to the 8 day EMA. Sold ½ of the position at T1= 33.22 taking $755 in profit off the table. NOAH is flirting with the 8 day EMA and looks to be putting in a handle. Filling out this position of the 8 day EMA will be assessed.
Current remaining position up: 6.19%

Trade 2: Entered CBM on today’s pullback to the 8 day EMA. Hard Stop is placed at 4% below purchase price at 47.42. Sold ½ the position when T1 = 54.34 was triggered this morning. Closed 175 shares at 54.30 for a profit of $857.50
Current position up: 7.23%

Trade 3: Entered FB at 106.30 on 11/25 on a break above the 8 day EMA. At this point FB has not gotten in gear and may be a weak member of the portfolio. This would make FB the first stock to cut if a stronger candidate is identified. The action in FB today show why. Price bounced up and through and then drew back. T1 = 10% above entry at 116.93 and a Hard Stop placed as a conditional market order at 102.04.
Current position up: 0.77%

Trade 4: Entered NOW at 86.55 today on a bounce from the 8 day EMA on 11/30. T1 = 10% above entry at 95.21 and the Hard Stop is at 83.09.
Current position down: -0.09%

Strategy II: No Open Trades

Wealth & Income Generation Strategy III Trades: I like how the enhanced stop loss set up is working with the Strategy III trades. While no one likes to get stopped out of any trade keeping the losses to less than a week’s worth of average income has solve the issue of losing several weeks of booked profits when a trade goes against us.

Trade 1: Long IWM Jan16 127C & 127P – Sold 7 contracts of Dec1 120.5C at 0.45

Trade 2: Long TSLA Jan17 250C & Long Jan17 220P – Waiting Set Up

__________________________________________

Highlight Stocks: Several of the stocks of interest are respecting their 8 day EMA’s and may provide entry triggers at these levels. We now have 4 stocks working for Strategy I. I will look to add one more stock and/or add to the existing positions where partial profits have been taken.

Remember I’m position sizing for 4-5 position on $70K in trading capital or $140K at full margin. Each trader must position size to match their own risk profile!

Upside Candidates: NOAH, CBM, & CRM

On the Radar: TSLA, NFLX, PANW, DATA, LNKD, HAWK, EPAM, YY, WETF & EBIX

Downside Candidates: FIT, MBLY & AFSI

Pre-Earnings: CALM, PLAY, RHT & NKE

Early Warning: Waiting for a new signal.

I will trade UPRO or SPXL for the SPX, TNA for the RUT and TQQQ for the NDX.


November 30, 2015

Good Day Traders,

I hope all the Active Trend Traders have noticed the measurable improvement since we got back to the 8 day EMA for triggering the majority of our trades over the past 3 months. This month we closed out trades for a monthly profit of over $3600 which brings the average profit for the last 3 months to just over $3300. Compounding this average monthly profit is just shy of my target of 40% return per year. I’m working on the portfolio building part of Strategy I and the initial back testing is looking exceptional. I’ll be discussing this at the Wednesday evening training session.

Market Update: Each of the Tracking Indexes flashed a bearish reversal signal today on the daily charts. The S&P price action engulfed the previous six trading days and closed just below the 8 day EMA. The Nasdaq 100 engulfed Thursday and Friday’s action and finished just on top of the 8 day. The Russell did a bit better finishing with a Dark Cloud reversal pattern well above the 8 day EMA.

Each of the Indexes show weakening daily momentum oscillators but will the follow on price action result in a pullback or a quick reversal to power further up into established resistance zones. I like the RUT better than the other Indexes from a potential perspective. I’m watching for a pullback approaching the 1189 level. This is about midway down last week’s candlestick. The middle third of the large candlesticks tend to be zones of either support or resistance depending on the color of the candle. Last week’s candle was bullish.

Both the S&P and NDX look a bit weaker than the RUT and perhaps in need of some additional consolidation before pushing higher. On the other hand with the Fed meeting in 2 weeks the Indexes may surprise us and push higher with the expectation of a rate hike!

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Managing Existing Trades: Through the end of 2015 I will be building a 4-5 portfolio positions for Strategy I. The back testing for the mechanics of holding until there is a longer term exit are ongoing and appears to be a great enhancement for Strategy I. The mechanics of the process will increase clarity and simplicity for our members. Once the portfolio is full our work will focus on managing the 4-5 open positions using conditional orders with established ATTS rules. Members should find the mechanics straight forward and objective.

Strategy I: Currently 4 open trades.

Trade 1: Entered NOAH on today’s pullback to the 8 day EMA. Sold ½ of the position at T1= 33.22 taking $755 in profit off the table. If NOAH pulls back to the 8 day EMA I would attempt to reestablish a full position.
Current position up: 9.01%

Trade 2: Entered CBM on today’s pullback to the 8 day EMA. Hard Stop is placed at 4% below purchase price at 47.42. Sold ½ the position when T1 = 54.34 was triggered this morning. Closed 175 shares at 54.30 for a profit of $857.50
Current position up: 8.56%

Trade 3: Entered FB at 106.30 on 11/25 on a break above the 8 day EMA. At this point FB has not gotten in gear and may be a weak member of the portfolio. This would make FB the first stock to cut if a stronger candidate is identified. The action in FB today show why. Price bounced up and through and then drew back. T1 = 10% above entry at 116.93 and a Hard Stop placed as a conditional market order at 102.04.
Current position down: -1.94%

Trade 4: Entered NOW at 86.55 today on a bounce from the 8 day EMA. T1 = 10% above entry at 95.21 and the Hard Stop is at 83.09.
Current position up: 00.53%

Strategy II: No Open Trades

Wealth & Income Generation Strategy III Trades: I like how the enhanced stop loss set up is working with the Strategy III trades. While no one likes to get stopped out of any trade keeping the losses to less than a week’s worth of average income has solve the issue of losing several weeks of booked profits when a trade goes against us.

Trade 1: Long IWM Jan16 127C & 127P – Sold 7 contracts of Dec1 120.5C at 0.45

Trade 2: Long TSLA Jan17 250C & Long Jan17 220P – Waiting Set Up

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Highlight Stocks: Several of the stocks of interest are respecting their 8 day EMA’s and may provide entry triggers at these levels. We now have 4 stocks working for Strategy I. I will look to add one more stock and/or add to the existing positions where partial profits have been taken.

Remember I’m position sizing for 4-5 position on $70K in trading capital or $140K at full margin. Each trader must position size to match their own risk profile!

Upside Candidates: NOAH, CBM, & YY

On the Radar: TSLA, NFLX, PANW, DATA, LNKD, HAWK, EPAM, CRM, & EBIX

Downside Candidates: FIT, MBLY & AFSI

Pre-Earnings: CALM, PLAY, RHT & NKE

Early Warning: Waiting for a new signal.

I will trade UPRO or SPXL for the SPX, TNA for the RUT and TQQQ for the NDX.

 

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