KEEP CALM

I've put together a video on the current state of the market and trading it going forward. 

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get nuts

Going back the past three months the area surrounding 16.40 has no doubt offered a great deal of support/resistance

Now again, just a little over two days since the VIX was over 26, it is now testing that 16.40 area again. Granted it is trading below the support level now, but I think of bigger consequence is where it closes the day. We are coming up on a holiday weekend, the S&P 500 is up 100 points off of the Brexit lows, so there is a good chance that running into the close there could be enough profit taking that could send the VIX back up above support to close the day. 

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diamond topping pattern

Just for a minute and take a look at the chart of the Nasdaq for the past two years. It has to be the worst time period ever for the chart. There is no direction, no conviction and more importantly, no sustainability in either direction. 

Every dip is met with insatiable buying and every attempt to break out to new highs is met with a sudden reason to sell-off

That is the current state of the Nasdaq and the market. If you are not trading the market with this in mind, you are buying at the top and shorting at the bottom... and that is no good, my friend. 

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dip buyer buy the fucking dip

Technical Outlook:

  • Day 2 of the dead cat bounce unfolded yesterday and it was a brilliant one. 
  • Back-to-back +30 point days on SPX is a rarity in general, but not when you are coming off the heals of a major sell-off. 
  • Much of the Brexit losses have been erased following the two day bounce. Only 43 points away from the closing highs prior to the Brexit vote. 
  • Considering that Monday SPX was trading below 2000 and now back at 2070 two days later, is quite impressive. 
  • Today is the last trading session of the month - typically bearish. Only once this year and twice last year, did it result in a positive return and June tends to be the most bearish of the of all the last day of trading months. 
  • There may be a great deal more of maneuvering by the funds today to get their window dressing done in light of the events of the past week. 
  • Global terrorism seems to have lost its effect on the market. The attack in Orlando and in Istanbul has had zero impact on price action as have other ones before it. 
  • SPY volume has dropped off for a third consecutive day, but still above recent averages. I suspect volume with get incredibly light over the next two days as the holiday weekend gets closer. 
  • Some big gaps from the past two days remain unfilled on SPY and other charts (DIA, IWM, QQQ).
  • SPX 30 minute chart shows a market that has bounced hard and fast with resistance overhead looming at the 2085 area. 
  • VIX is back to a very important level - the 16.40s. This level has been a strong place of support and resistance, and could see a hard bounce off of it today. 
  • SPX reclaimed its 5 and 10-day moving averages yesterday, but the bigger 20, 50-day moving averages loom overhead. 
  • As price creeps back into the 2050-2090 range on SPX, you have to be concerned with price action giving way again to bearish tendencies. 
  • Market is assuming that rate hikes are pretty much off the table for all of 2016. 
  • Biggest issue for the time being for the bears is that the Brexit vote to leave, may not generate a ton of additional headlines and there is no guarantee, that the politicians, who are against such a move, would even allow it to happen. 

My Trades:

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The stock market is crazy and volatile. But you can still profit from it while minimizing your risk! Join the SharePlanner Splash Zone and start trading with me to see for yourself what a membership can do for your portfolio. Sign up for a Free 7-Day Trial - with your membership, you will get each and every trade that I make with real-time text and email alerts (international too) as well as access to my chat-room that I trade in each day. Click Here to try it for Free!.

Here's your swing-trading watch-list:

Long Allstate (ALL)

all

Long JC Penney (JCP)

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The SharePlanner Reversal indicator suggests the bulls might not be out of the woods just yet. This week it is flashing an early reversal which really comes as no surprise following the massive sell-off on Friday and then again on Monday after the Brexit vote.

bears need to come back and short this market

Now the market is on an impressive two day rally and has the bulls thinking that the implications surrounding the Brexit vote is behind us. But I do believe that caution is still greatly warranted. Rarely do you see a 1,000 point drop on the Dow or 100 points on SPX and suddenly think that all is fine in the world again. Instead you usually see the bears re-emerge in an attempt to push the market lower again. 

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Technical Outlook:

  • Dead cat bounce started yesterday resulting in one of the year's best rallies. stock market bounce be like
  • These bounces, if it remains part of a larger sell-off, can last anywhere between 2-4 days. 
  • The VIX is melting away at an incredible rate. Over the last two days, has gone from almost tagging 27, down to 18.75. Yesterday saw a decline of 21.4%. A push back below 20 historically has been where stock prices are deemed more stable. 
  • The T2108 (% of stocks trading above their 40-day moving average) rebounded nicely with a 29% move of its own all the way back up to 35.2.
  • The 200-day moving average was reclaimed in SPX and Dow yesterday. Still trades significantly below it on the Nasdaq and was rejected at the 200-day MA on the Russell. 
  • SPY managed to fill the gap on Monday's decline. The larger gap left unfilled, of course, is the Friday's gap following the Brexit vote. 
  • SPX managed to break back above the double top confirmation level. 
  • Russell 2000 had a solid bounce off of the 1090 level. 
  • As price creeps back into the 2050-2090 range on SPX, you have to be concerned with price action giving way again to bearish tendencies. 
  • Market is assuming that rate hikes are pretty much off the table for all of 2016. 
  • Volume was well above average yesterday, but still dropped for a second consecutive day. 
  • Biggest issue for the time being for the bears is that the Brexit vote to leave, may not generate a ton of additional headlines and there is no guarantee, that the politicians, who are against such a move, would even allow it to happen. 

My Trades:

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The stock market is crazy and volatile. But you can still profit from it while minimizing your risk! Join the SharePlanner Splash Zone and start trading with me to see for yourself what a membership can do for your portfolio. Sign up for a Free 7-Day Trial - with your membership, you will get each and every trade that I make with real-time text and email alerts (international too) as well as access to my chat-room that I trade in each day. Click Here to try it for Free!.

Here's your swing-trading watch-list:

Short Ball Corp (BLL)

bll

Short Eagle Materials (EXP)

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I have a lot of concerns when it comes to implementing Warren Buffett's approach to the stock market. I think the buy and hold approach is outdated and highly risky. Today's market requires that you actively manage and trade your portfolio and not allow naivete or passive investing hamper your ability to trade the stocck market. 

You have to be on top of your game, and if you are leaving your money in the hands of some big bank financial adviser, I would stay on top of him and demand that he provides you with returns that beats the S&P 500 each year, or what good is he/she?

However, there is one rule of Warren's that I do like and it is this: 

first rule of investing

The first rule is not to lose. The second rule is not to forget the first rule. I have always been a huge believer of this trading axiom (even though he meant it for investors). 

Beyond not losing money, I make sure I don't put  myself in a position where I can lose a lot of money. That means I don't play earnings, in the case of Brexit, I went to cash, because I thought the outcome was too uncertain and to be on the wrong side of the trade would have meant doom for my portfolio. 

You see, when you can avoid the big losses from being long on Friday and this Monday, and instead of being in cash and waiting for more certain market conditions, it gives you a massive leg up on this market. And that doesn't come from picking stocks right, that comes from managing the risk right. That has to be your mindset in this market if you are wanting to succeed. Manage risk first, profit second, and this will make sure that you ultimately don't lose money when it comes to trading in the stock market. 


 

I have been actively teaching and trading with thousands of other traders over the years, and helping them better manage risk and put themselves in a position to consistently profit from the stock market. They become the manager of their future and not dependent on some financial adviser that spends the majority of his time out on the golf course. 

I am present every day in the financial markets. I provide the risk to every trade that I make, and on a day like today, I actually made money. I didn't lose money. That is because I cashed out my positions yesterday and went straight to cash before the market sell-off ever happened. When the opportunity arose this morning, I shorted SPY and made a quick buck off of it. I am active in how I manage my accounts. I don't take unnecessary risk, and I preserve the capital in my portfolio at all costs to avoid draw-downs 

If you'd like to trade with me, you can do so by simply becoming a member of theSharePlanner Splash Zone. With your membership you will get access to all of my real-time trades, the chat room that I trade from each day, as well as my real-time trade alerts via text and email. It is Free for the first 7 days and you can cancel at anytime. 

With The Splash Zone, you will get my low risk and high probability trade setups that no other trading service can offer.

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Start Your Free 7-Day Trial Today! 

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Another one of those days where the market gaps up (and in some cases down) and does absolutely nothing thereafter. Granted we still have two hours left before the market closes, so anything is possible, but nonetheless, this price action is boring me to tears today. Over the past three trading sessions, the market is essentially rewarding those who are gambling on the overnight price action which is no doubt risky. 

What is concerning for the bulls here today is that price on the Russell index and the S&P 500 have both seen rejections at the 200-day moving average. That could change before the close, but that is the current state as of this post. 

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