Trader’s Report for May 8th

Good Day Traders,

Overview & Highlights:  Watch for slight modification in Alerts for Strategy I orders.  I will slightly widen the entry price range targets.  This should result in increased entry opportunities to members parallel trading with the Active Trend Trading System.

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, May 13th
Register Here:
Note this session will be at: 11:30 a.m. PDT

Next Training Webinar:  May 11th
For Premium Members our Wednesday evening training is developing some fantastic traders!
Mid-Week Market Sanity Check Topic:  Foundation Set Up for Strategy III

Managing Existing Trades:   Positions open for 2 strategies.

Strategy I Portfolio Building:  Sold out of SFM the day before earnings which was a wise decision because SFM was hit more than 10% when it reported.  Took a small loss.

Strategy I Weekly Results Week ending 5/6/16:
SFM:  Loss -$67.20

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:

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. 

Several members have asked about this strategy and a more detailed explanation is available at:

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

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:

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: 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:  I was watching the MarketSmith update this weekend and thought it interesting that the IBD traders were pointing at that the 2016 market has not been a great year for building positions.  They have reduced their expectation down from 15%-25% to 5%-15% on their trading.  The ATTS Strategy I has been experiencing similar results!  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.  This will drive stock selection and trades.

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.

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.

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

If simplifying your life by trading along with us using the index ETF is of interest you can get the full background video at:

General Market Observation:   Each of the three Tracking Indexes are showing mixed signals between daily and weekly charts.  The daily charts look ready for a bounce while the weekly charts look to be preparing to roll over.  One thing for sure is that we have well defined levels of support and resistance to plan around.  The Indicators are also mixed with the TSI on the weekly charts having crossed to the downside and the TSI on the daily looking ready to cross up.  One of the things that leads me to believe at least a brief bounce will take place this week is how weekly Momentum actually increased while prices fell for the week on weekly charts of each Index.  This is subtle but shows that buyers may fight to hold ground.  Secondly the level of Puts outstanding has increased to extremes.  When the Put/Call ratio gets out of balance in either direction it tells us the market is out of balance and a turn in the opposite direction is close.  The Put/Call ratio closed the week near highs which tends to translate to a bounce in the Indexes.

The challenge for traders seeking to trade the Index ETFs is that much of the movement in the Indexes has been going on after normal market hours.  Currently the RUT is holding up better than the other two indexes.  If one is looking to get long one of the Indexes the RUT via IWM or TNA may be your best opportunity if price cooperates and provide a bounce at support.

The issue for each of the Indexes is that while they appear ready to bounce on daily charts, each would be bouncing into resistance formed by either downtrend resistance lines or moving averages.  The bounce into these areas may provide the opportunity for downside exposure through either Puts, shorting the non-leveraged ETF’s or trading the leveraged inverse ETFs.  These levels are evident on the SPX daily chart below.  Price is currently at support of 2042 with resistance coming into play at the 2075 and 2100 levels.  Plan directional trades at these levels of resistance and support.

Spy 5-6

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 11:30 a.m. PDT.  I’m looking for the best time to offer this webinar.  I want to try closer to the close on Friday to see how that works out for potential trades going into the close.  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, May 13th
Register Here:
Note this session will be at: 11:30 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:

 –   The Active Trend Trader Referral Affiliate Program is ready.  For more information or to become an Affiliate please register here:

Index Returns YTD 2016

I’ve added a column to the Index YTD performance chart.  The column on the far right shows the depth of the current correction with respect to the highs of the top from 2015.  Note both DJI & SPX are positive territory for 2016, but NDX and COMP are looking weak!

Index 5-6


ATTS Returns for 2016 through May 6, 2016

I’m pleased how the ATTS system has shown growth every month of the year thus far.  We are managing Strategy I which encompasses portfolio building well because thus far this year it has not been a great portfolio building year.  The quick hitting option trades of Strategy II are working along with the steady Income & Wealth objective of Strategy III.


Percent invested $100K account:  Strategies I & II invested at 3%; Strategy III invested at 20%.


Current Strategy Performance YTD (Closed Trades)
Strategy I:  Down -844.05 or -0.84%
Strategy II:  Up $1687 or 16.87%
Strategy III:  Up $9338 or +46.7%
Cumulative YTD:  10.2%

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:  

Updated first full week of each month.

Outs & Ins:   CRTO, MHK and ZBH make their debuts to the IBD50 this weekend.  Of the three stocks both CRTO and ZBH look the most promising.  Watch for bounces from the 8 day EMA on all three for potential entries if the market strengthens. 

Of the remaining IBD50 stocks many are already past earnings so if the market strengthens there may be some long side opportunities.  The following have pulled back into support and may provide upside potential of 5% or more.  USCR, CTXS, GPN, CBM, MAS, MSCI, HAS and AOS.  AOS looks like a very good candidate. 

Keep in mind that if the market is rebounding only as a relief rally any long trade may quickly be stopped out.  When your trade is up 5% set a trailing stop at 1% to assure you get out with some profits.  This is clearly a base hit kind of market to the upside.

In-Out 5-6

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 or leave a post on the website.   Thanks.