Trader’s Report 3-14

Good Day Traders,

Overview & Highlights:  In tonight’s edition, Mike looks at what clues the European Market may be flashing for the US Market.  Is it good or not?  See what Mike’s Macro Musings is highlighting below!

Starting the week of March 19th, the format of the How to Make Money Trading Stocks webinar will change to a shorter webinar twice a week.  Because your time is important, I want to pack a quicker paced and shorter webinar in to approximately 10-15 minutes.  It will include brief market update and a highlight of at least one trading opportunity.  The first webinar would be on Monday’s shortly after the market closes to help prep for the week.  The second webinar will be on Friday with a quick rehash of how the weekly plan turned out.    If you have any comments or suggestions, please email me at: dww@activetrendtrading.com

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

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

The How to Make Money Trading Stock ShowFree Webinar every Friday at 11:00 a.m. PDT.   This weekly live and recorded webinar helped traders find great stocks and ETF’s to trade with excellent timing and helped them stay out of the market during times of weakness.

How to Make Money Trading Stocks on Friday, March 17th
Register now for the next live webinar at the link below:
 Register Here:  https://attendee.gotowebinar.com/register/2182251686462488834
Time 11:00 a.m. PDT

 Next Training Webinar:  March 15th       
For Premium Members, our Wednesday evening training is developing some fantastic traders
Topic:  Two “Go-No Go” Indicators—Part 1

 ** Friday’s “Final Hour”: March 17th   ** 
Time 12:00 p.m. PDT
For Premium Members, provides trades and set ups during the final hour of weekly trading


Managing Current Trades:   Full Position in ESNT

ESNT Opened on 3/2 & 3/3 for average cost of 35.20
SL = 34.50 (Swing Low)
T1 = 36.97
T2 = 42.25 or 8 day EMA Rule

Strategy II Basic Options:  No Open Positions

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:   Foundation positions are open in SPY, TSLA and NUGT.  Total capital for Strategy III = 30% or $26.6K. 

 SPY:  Sold 17Mar 237C for 1.26 – Will tighten stops going into Fed Meeting
 TSLA:  Waiting for setup at the upper or lower Keltner Channel on the weekly chart
 NUGT:  Waiting for setup at the upper or lower Keltner Channel on the weekly chart

 Results this week: 
SPY:  Profit = 0.00
TSLA: Profit = 0.00
NUGT: Profit = 0.00

 Running Performance premium collected plus residual value of LEAPS
SPY:  +13.37%
TSLA: +28.20%
NUGT: +7.04%
Combined: 19.70%

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.

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

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

Additionally, some of these trades 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

Early Warning Alerts for Leveraged Index ETFs:   Last Trigger: 11/4—Waiting new signal or secondary trigger.

EWA Account Return for 2017:  0.09%

The Early Warning Alert Service alerted on all market lows in 2016.  See the link below for the new video for 2016 that highlights entry refinements that will provide improved entries even in environment like 2016.  In 2016 the entry triggers were challenging because of the number of straight off the bottom moves.  Mike and I have analyzed this and have tested adjustments in place going forward.

EWA 2016 Update Video:  http://activetrendtrading.com/early-warning-alerts-update-for-2016/


Potential Set Ups for this week:   Waiting on the Fed.  I like FAS, TSLA & WB

GOLD Miners:  NUGT and DUST are the two leveraged ETFs we follow.  These emulate non-leverage ETF GDX.   NUGT has pulled back to support. Is this the bottom?  Looking forward to the potential run in gold in the June-July timeframe.

Financials:  FAS is in an uptrend matching XLF.  If the Fed raises rates it could be good for Financials.  FAS is showing a bull flag and has pulled back to support around 46. Need a TSI Tick-up to trigger a trade.  This ETF may be the best long candidate in the short term.

Biotech’s:  IBB is pulling back to support near 295. If this fails look for more downside.  Bio’s tend to top in late February.  Which may provide a trade in LABDLABD is perfect example of the challenge of trading the inverse leveraged ETFs.  This is due to backwardation and contango.  To trade with some confidence, watch for shorting set ups on IBB and then trade into LABD.  In the case of IBB look for a break below the short-term trend line connecting the lows of 1/31 and 3/8.

Oil:  Even though in a slump for several years’ crude oil tends to rally after lows in February.  At this point USO the non-leveraged ETF for oil is stuck in a tight price range.  UCO is stuck in a similar range of 10%.  March is mostly an up month for oil, so look for a potential buy in UCO at the 17 level.  Neither TSI or Momentum are trending!

Indexes:  Covered in General Market Observations


Mike’s Macro Market Musings:  Act Locally, Think Globally

I am going to assume for purposes of the following presentation that most of those reading this are U.S. residents even if not born and raised in the U.S.  As such, our focus in the financial markets naturally tends to be on our domestic markets, mainly the U.S. stock markets.  In fact, due to the sheer size and liquidity of our equity markets, they are even a focus (even if not the whole focus) for foreign investors and traders.  However, be that as it may be, I believe it’s prudent to remind ourselves from time to time that we are not the only “game in town”, so to speak.  It could be a mistake to extrapolate the price action and trends of our domestic equity markets to other sovereign markets and project that perception globally and therefore assume that whatever is happening in our domestic markets and economy is similar to what is happening everywhere else.  It also may be a mistake to assume that the U.S. economy and markets can exist and function independently and away from global influences and that any global imbalances can and will persist indefinitely without reconciliation.

For comparison purposes, let’s take a look at some charts of equity indexes outside the U.S. while keeping in mind the string of all-time record highs posted by our domestic equity indexes so far in 2017.  Following is a chart of the Stoxx 50 going back nearly 20 years.  Think of it as the Dow of Europe. It holds very large-cap stocks across the Eurozone.  Not quite the same as the U.S. Dow index chart, which has broken out to all time highs.  In fact, since 2000, this index has been doing nothing but putting in a series of lower highs, the very definition of a downtrend according to some.

How’s the French stock market doing, at least according to its’ index, the CAC 40?

OK, so Europe isn’t doing well. Neither is Japan or China, for that matter, both of which are near 50% off their all-time highs.  Technically, there is significant resistance in many global developed equity markets at downward sloping trendlines that have developed over periods of years and even decades, resistance areas that will be hard to penetrate (admittedly, though, resistance breakouts are always possible even if considered by many to be unlikely).  What can all of this mean?  It would seem to indicate that this recent euphoric global rally is largely confined to the large caps in the U.S., Canada, the UK and Germany. And, except for the U.S., most are making just slight new highs. That’s a huge global divergence that may not bode well for global stock markets since we know that divergences eventually reconcile, and I think it a mistake to assume that our U.S. markets will not be involved in any attempt at said global reconciliation

 I will concede, though, that a reconciliation of these divergences may take the shape of relatively underperforming foreign indexes stepping up to the ongoing uptrend in the U.S. indices, a scenario in which the rising tide could lift all of the boats, so to speak.  Either way, I believe that as investors and traders we should be mindful of what is going on around us and try not to be overly myopic.

 Just something to think about


General Market Observation:  The probability of an interest rate hike by this week’s Fed Meeting sits at over 90%.  How will the Indexes react?  We will see tomorrow!  Price action over the last three days has been muted as the markets prepares for tomorrow’s decision.  For the Three Tracking Indexes the NDX is the strongest and the RUG the weakest.  Both the SPX and RUT have pulled back to a support zone but I won’t be a buyer until after the reaction to the Fed decision.

The daily chart of the SPX shows support at the 2354.90 level.  This lines up with the 20 day EMA.  If price bounces from this level, the reaction move will tell us about the market direction.  If the move up is weak and fails to reach the past high of 2400 and rolls over then this may reflect topping action and a stronger pullback will follow.

NDX is hugging the 8 day EMA.  Negative divergence is showing up on the daily chart.  The weekly chart is extended and a reversion to the mean moving average would finish rolling weekly TSI and Momentum over.

The pullback in the RUT has reached support at the 1350 level.  The daily charts look ready for a bounce reaction.  The long tail on the daily candle does show us where buyers came in to support the Russell.

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

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

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

The How to Make Money Trading Stock ShowFree Webinar every Friday at 11:00 a.m. PDT.   This weekly live and recorded webinar helped traders find great stocks and ETF’s to trade with excellent timing and helped them stay out of the market during times of weakness.

How to Make Money Trading Stocks on Friday, March 17th
Register now for the next live webinar at the link below:
 Register Here:  https://attendee.gotowebinar.com/register/2182251686462488834
Time 11:00 a.m. PDT

To get notifications of the newly recorded and posted How to Make Money Trading Stocks every week subscribe at the Market Tech Talk Channel:   https://www.youtube.com/c/MarketTechTalk

Index Returns 2017 YTD

ATTS Returns for 2017 YTD Closed Trades

Percent invested initial $116.6K account:  Strategies I & II invested at 17%; Strategy III invested at 26.6%.

Current Strategy Performance YTD (Closed Trades)
Strategy I:  Down -330.90
Strategy II:  Up $611.00
Strategy III:  Up $4532.00
Cumulative YTD:  4.13%

Active Trend Trading’s Yearly Objectives:
–          Yearly Return of 40%
–          60% Winning Trades
–          Early Warning Alert Target Yearly Return = 15% or better

For a complete view of specific trades closed visit the website at:  http://activetrendtrading.com/current-positions/

Updated first full week of each month.  The next update after first week in April.


 Outs & Ins:  NTRI and WB make their way onto the IBD 50 mid-week.  Both have been on the list in past years.  NTRI has already broken out and looks to be putting in a sideways flag.  WB looks more interesting on a weekly chart.  WB was strong across the board but dropped out of the top due to EPS Rating.

The top three stocks from the Fundamental Sort were: AMAT, ESNT and NTRI.  Also watch PAYC, NVDA and MOMO.

Share Your Success:  Many of you have sent me notes regarding the success you are having with the Active Trend Trading System.  Please send your stories to me at dww@activetrendtrading.com or leave a post on the website.   Thanks.

Comments are closed