Good Day Traders,
Last week two short Tech Tip Videos were posted covering “How to Buy Bottoms” and “How to Sell Weekly Options”.
If you haven’t seen them yet visit my YouTube Channel at: https://www.youtube.com/channel/UCLK-GdCSCGTo5IN2hvuDP0w or
at the Free Video section of the ATTS Website: http://activetrendtrading.com/videos/
Thanks for all the great comments about the ATTS service and the “How to Make Money Trading Stocks” webinar that blast out every Friday at 10 a.m. Pacific. Please let others know about this great webinar! You can either join live or catch the replay on YouTube.
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For Premium Members our Wednesday evening training is developing some fantastic traders!
Mid-Week Market Sanity Check Topic: Candlesticks Part 2
General Market Observation: Greece, China’s Bear Market or interest rates, which will be the undoing of the US market? Throw on top of this mix earnings that start in earnest this week volatility could continue through the remaining summer months. Each of the tracking indexes has established a lower low and is in a short term down trend. It appears that a new price range is being established at a lower level. This action provides more clues that prices on the Indexes are in the process of forming a rounding top but no huge drop to the downside yet. Keep in mind that the indexes have not provided a correction over 10% in the past 3.5 years and that the Bull Market has been steaming ahead for over 6 years. While we have a lower swing low at this point it is not known what type of rebound will emerge. It could be a weak relief rally just back to resistance and then another plunge. Greece will continue to be in the headlines until a final deal is either worked out or not. I personally think what’s going on in China is of much great significance with their market having slipped into a Bear Market declines. Combining the two and any other drama coming from anywhere else like Puerto Rico could tip the scales towards more selling. The challenge for all is where can we put the capital that’s safe?
Check the weekly charts on all three indexes, for all of last week’s movements each index closed almost unchanged for the week.
SPX: Prices tested support at the 2045 level and then provided three violent days of up and down! The VIX which measures volatility on the S&P raced up to 20 before dropping on Friday. With VIX at elevated levels we can expect these wide daily swings to continue. This in turn increases the risk of trading in either direction using the SPY. I’ll be watching support and resistance for small body candlesticks to appear as clues for potential trades.
In last weekend’s Trader’s Report the chart below was included showing where price were going to fall to if the Sunday Night Futures maintained their levels. As it turns out they did and price during the week reach the reversal box a couple of time during the week. The second chart shows this price action. Note on the second chart that the indicators are looking more positive and may reflect that a bounce is in order. I look to trade only short term trades going into this week, potentially in both directions but lasting no more than a couple of days.
Preferred ETF’s: SPY and SPXL
NDX: The NASDAQ 100 rebounded well on Friday but stayed below the 20 and 50 day EMA’s. At this point I will treat this as a simple relief rally in a down trend. As covered in “Buying Stocks at the Bottom” Tech Tip video we can wait for any new up move to prove itself and look for a higher probability entry. With high volatility this type of action can happen very quickly and can happen during the middle of the trading day.
Preferred ETF’s: QQQ and TQQQ
RUT: The Russell is providing a chart that looks similar to the NDX. Going into this week I look for a potential bounce to the 50% Fib Retracement on the move from 6/23 to 7/7. This would take prices approximately to the 1260 level. If prices do retrace up to 50% level then watch for small doji like candlesticks to show indecisiveness and weakness. Also a great place to take partial profits if currently long in one the Russell ETFs.
Preferred ETF’s: IWM and TNA
The Early Warning Alert Service has hit all three major market trading point this year. See this brief update video for more details: https://youtu.be/PRLmPQLHjiI
If simplifying your life by trading along with us using the index ETF is of interest you can get the full background video at: http://activetrendtrading.com/etf-early-warning-alerts-video/
The How to Make Money Trading Stock Show—Free Webinar every Friday at 10 a.m. PDT. This weekly live and recorded webinar helped traders find great stocks and ETF’s to trade with excellent timing and helped them stay out of the market during times of weakness.
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Index Returns YTD 2015
ATTS Returns for 2015 through July 10, 2015
1.1 % Invested
Margin Account = +2.1 % (Includes profit in open positions)
Early Warning Alerts = +3.08%
Active Trend Trading’s Yearly Objectives:
- Yearly Return of 40%
- 60% Winning Trades
For a complete view of specific trades closed visit the website at: http://activetrendtrading.com/current-positions/
Managing Existing Trades: No Open Strategy 1 Trades.
Special Trades: No Open Strategy 2 Trades.
Strategy 3 Trades: 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: Earnings begin in earnest this week. Over the next 2 weeks over half of the IBD 50 stocks report earning by July 31st. TSCO looks like it might set up for a pre-earnings run. It reports AMC on 7/22.
Potential Set Ups for this week: Very few stocks escaped last week’s action undamaged. Because of last week’s drop there is a target rich environment of stocks getting ready to potentially bounce from support or drop from resistance. It is expected that volatility will continue into this week as the Wednesday deadline on Greece coming up with a plan approaches. A hiccup there or in China could sent buyers running for cover. Taking at least partial profits on long trade in the 5-10% is a wise way to approach the week until more stability comes into the market.
Upside: This week’s stocks worth waiting for to the upside include: GTN, FLTX, ZBRA, ANET, UTHR, PGTI, LCl**, NLNK and FEYE. The last three and GTN look the best.
Downside: Almost anything China related. Downside candidates include: YY, BIDU, VIPS, BITA, QIHU, NOAH, BABA & CUDA.
Toss Ups: The following could go either direction: CYBR, VDSI, AMBA, AFSI, INCY and NKTR.
Leveraged Index ETFs: We have a current Alert Signal active and we’re waiting for a new entry.
Outs & Ins: PGTI makes its debut on the IBD 50 this weekend. This stock looks promising and is approaching a breakout buy point.
Note that 52% of the list will report earnings by the end of July. The other 48% will report in August and beyond. Of these TSCO has potential for a pre-earnings run. GTN, FLTX, ZBRA and ANET are good candidates.
Comments and opinions written below this line of text may be provocative and only obliquely related to trading. Some may find these “Off the Wall” comments challenging to their outlook on life. I will not post any comments made on subject matter below this line, so if you disagree blast away.
OFF THE WALL
Off the Wall: Everyone wants to be relevant or at least have opinions that are relevant. Having someone challenge my opinions or my beliefs must mean that you don’t like me, which makes me feel bad and offends me! What you don’t feel the same way? Well I don’t care because I’m right and it’s just your opinion. Your opinions are stupid anyway because you didn’t go to the prestigious universities that I went to—so there! What you think my opinions are stupid? Well clearly you are prejudiced against old people who have a lot more experience than some young, ‘wet behind the ears’ punk! What you wish I would just die and make room on the earth for someone else with your ideas? Well up yours, I hate you and how you’ve mucked up my country!
Hmmm that was a productive conversation! I find exchanges like the one above very sad! First because it does seem that we as a culture have place such a high value on our own opinion. We talk at each other but we don’t hear each other. There is no debate, there is no exchange of ideas, there are no questions and there is no mutual respect. It seem that there is only a verbal battle of opinion statements which does little if anything to bridge differences.
Asking questions of someone with different opinions without a hidden agenda of trying to sway them is such a great way to learn about others and also give us the right to then share our ideas. A simple question like, “Help me understand why you believe that?” can often open doors with those we disagree with. If we start asking good questions and then listening to the answer will work wonders. What do you think?
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 firstname.lastname@example.org or leave a post on the website. Thanks.