Good Day Traders,
Overview & Highlights: We’ve made the turn and are now heading west on our road trip. I like TSLA to the downside and WOR to the upside. Each of the Indexes are still posturing for a move either up or down. The historic expectation for September is a solid pullback in preparation for the end of year rally.
Webinars: At Active Trend Trading we offer two webinars per week to provide training plus trade and market updates. See the schedule below for the next webinars.
How to Make Money Trading Stocks on Friday, Sept 2nd—Video from the Grand Canyon!
Register now for the next live webinar on Sept 9th at the link below:
Register Here: https://attendee.gotowebinar.com/register/3109323602625198340
11:00 a.m. PDT
Next Training Webinar: Recorded for Aug 31st
For Premium Members our Wednesday evening training is developing some fantastic traders!
Topic: Fixing Trades Gone Wrong!
Managing Existing Trades: Positions open for 1 strategies.
Strategy I Portfolio Building: Strategy I Weekly Results Week ending 8/26: Profit of $518.50
Bought 340 shares of PLNT at 20.25 on 8/2 – Closed ½ of position at 21.53 for return of 6.32%, a profit of 217.60
Closed second half of PLNT on 8/23 when T2 was hit. Sold at 23.30 for return of 15%, a profit of $518.50
Total PLNT Profit: $736.10
Strategy II Income Generation: No Open Trades
For members wanting to better understand this Strategy there is a very good training video at: https://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 8/26:
SPY: Profit of $358.00
TSLA: Profit of $718.00
Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 22.13%; Premium Collected since opening trade on 1/4/16 = $5,760.00
Sold 4 contract of SPY 26Aug 218.5C at 1.22 potential profit $488. Closed at 0.43 for a profit of $316
Trade 2: Long TSLA Jan17 250C & Long Jan17 220 + New Positions Jan17 210C and 220P: Current Position Total Invested $14,900. Currently Up 90%: Premium Collected since opening trade on 9/28/15 = $14,887.50 + New Positions at $3,220.50 = Total Collected $19,489
Sold 2 contracts of TSLA 26Aug 222.5P at 3.70 potential profit $740. Closed at 1.91 for a profit of $358
Sold 2 contracts of TSLA 26Aug 225C at 2.30 potential profit $460. Closed at 0.50 for a profit of $360
Several members have asked about this strategy and a more detailed explanation is available at: https://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: https://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
Potential Set Ups for this week: TSLA is weakening and may provide a significant downside opportunity. The spring on WOR is tightening and may provide a buy opportunity soon.
Pre-Earnings Trade: None.
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!
Upside: Waiting for pullbacks on the Index ETF’s, BABA, SSTK, RAX & WOR.
Downside: SIX, PYPL, ULTA & NFLX. TSLA has broken downs and will wait for a pullup for a downside trade.
On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA & their associated non-leveraged Index ETFs. TSLA, BABA, NFLX, LGIH, RAX, STOR, ULTA, FIVE & WING.
Stocks identified by ** that are close to a potential entry point.
Early Warning Alerts for Leveraged Index ETFs: Waiting for either an initial or a second chance entry. Last Trigger: 6/27
EWA Account Return to date: 5.5%
The Early Warning Alert Service hit all eight major market trading points in 2015. See this brief update video for more details: Early Warning Alerts Update Video or at https://youtu.be/GJwXCL4Sjl4
If simplifying your life by trading along with us using the index ETF is of interest, you can get the full background video at: https://activetrendtrading.com/etf-early-warning-alerts-video/
General Market Observation: Today’s price action on all three Tracking Indexes was up but contained within last week’s range. This week last week’s highs and lows are the boundaries I’m watching. If we go with the typical downside bias of September, then look for potential downside trades if price move towards last week’s highs. The SPX looks weaker than the other two Indexes. A move up between 2186 and 2193 could be a retest and opportunity to the downside. On the other side of this plan would be a drop to the 8 week EMA or 2134 as a potential long side trigger. Each of the other Indexes provide similar levels for planning. If the highs are taken out after opening a downside trade close the position. If a long trade sets up and the lows are taken out, then close the long position.
The chart below is a weekly chart including today’s price action. Both oscillators look weak. The TSI has rolled over and crossed, but depending on this week could rebound. This is where we will watch for negative divergence on a weekly timeframe. This would be positive for a stronger pullback which would potentially provide a better set up to the upside in October. At this point the Indexes are posturing and trying to figure out which way to break.
The other scenario would be a continuation of the current sideways move up until the Fed report on September 21st.
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 Show—Free 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, Sept 2nd—Video from the Grand Canyon!
Register now for the next live webinar at the link below:
Register Here: https://attendee.gotowebinar.com/register/3109323602625198340
11:00 a.m. PDT
To get notifications of the newly recorded and posted How to Make Money Trading Stocks every week subscribe at the Market Tech Talk Channel: https://www.youtube.com/c/MarketTechTalk
Index Returns YTD 2016
ATTS Returns for 2016 through Aug 26, 2016
Percent invested initial $100K account: Strategies I & II invested at 0.0%; Strategy III invested at 25.98%.
Current Strategy Performance YTD (Closed Trades)
Strategy I: Down -895.75 or -1.27%
Strategy II: Up $3187.00 or +3.18%
Strategy III: Up $22028 or +84.9%
Cumulative YTD: 24.3%
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: https://activetrendtrading.com/current-positions/
Updated first full week of each month. The next update August.
Outs & Ins: Four stocks make their debut on this week’s IBD 50. RAX is early in its basing pattern but needs a pullback into the daily moving averages for a buy opportunity.
Upside candidates from the IBD 50 are, GIMO, SSTK, LGIH, STOR and BABA. The downside candidate is PYPL.
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.
