This is a new feature to SharePlanner that I am rolling out as of today, and that is my daily trading plan heading into each market session. This is one of the most important aspects of trading – to not only have an overarching trading plan that guides your way of trading and enforcing discipline, but to also have a daily trading plan, where you sit down and think, preferably write out, the day before you and look at what will be influencing the markets, how you will react to them, and what you expect to do if “ABC” or “XYZ” occurs. Now I understand that a great number of you folks work a regular job (I’m grateful that this is my only job – I couldn’t do both!), have families, and other responsibilities which limit you from spending the amount of time that I do in studying the markets, so the thought of taking an extra hour in the morning and mapping out the day before you is not only horrifying to you but probably to your spouse as well.
Hopefully then, you can piggy-back off of mine, or at least use it to accompany your own plan. The choice is yours, but I do believe that this will greatly help you and to get your mind focused on the day ahead and in the chaos that the daily market represents, you will find yourself working it with an even and steady hand.
As for the daily trade setups, that you have become accustomed to, they will still be around, but for now, I will be posting those trade setups in a separate post, with the aim of doing so before the market open each day as well.
Current Long Positions (stop-losses in parentheses): None
Current Short Positions (stop-losses in parentheses): DLLR (21.27), ESV (42.84), MR (33.39), SPY (109.91)
Economic Reports Due Out (Times are EST): Employment Situation (8:30am), Factory Orders (10am)
What to Expect:
- Obviously all eyes are going to be dead-set on the employment number, which will shape the direction of the market for the day. The last couple of times the reaction has been muted comparatively-speaking, but with the emotions running high, the market selling off as much as it has, and with the oversold conditions persisting, I think the response will be noticeable in one direction or the other.
- Market is pretty oversold and getting noticably over-extended. A market-bounce has got to be in the cards sometime within the next week.
- Concerned by the almost-doji hammer candle pattern formed on the S&P daily yesterday. Typically signifies short-term reversals.
- Employment number could provide the dead-cat bounce this market is likely due for should the number be good. If it misses big time, we could see a major, major sell-off today.
Actions I will be taking:
- I’d like to see my position in Dollar Financial (DLLR) reach its target price – yesterday I came oh-so close to hitting it, but no-cigar.
- On ESV, I am a bit concerned about the rally off of Tuesday’s lows, that resulted in an intra-day cup & handle pattern, that has been followed up with two consecutive days of the stock rallying despite pretty rough market conditions. If it manages to break the previous high, I’m likely going to take my remaining profits and running.
- Will consider buying a large stake in the Dow ETF (DIA) to balance my short positions going into the three-day holiday weekend.
- Won’t be adding any new short positions to the portfolio today – solid short-setups are becoming far and few between these days with the amount of selling that has taken place.