#DayTrading – in the pursuit of simplicity…

Best day trading rally ever?

On TQQQ, the 3x-leveraged ETF for the Nasdaq, 15 percent year to date ($15k total trading $100k on each trade), with 75 percent of the trades profitable. No overnight risk.

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#MarketTiming – the rally gets long…in the tooth

TREND TRADE: Long from open, 1/4.

SWING TRADE: Long from open, 1/4.

DAY/SCALP TRADE: Buying the dips…

PRICE TREND: Nasdaq up 6 days.

SETUP:

The rally, which began on the open of 1/4, is now five days old.  It can go higher.  In fact breadth is indicating it will, at least for one more day.

But…

Five days in a row put the Nasdaq on borrowed time.  Trader Vic Sperandeo used to say “if the market doesn’t do what it is expected to do, it will do the opposite twice as much.”  I still expect it to go up more, but I’m also on the alert to the “twice as much.”

On this rally, it has mostly been Nasdaq, Nasdaq and more Nasdaq so far.  TQQQ, the 3x-leveraged ETF I use for that index is up 7.2% in these five days, XIV is up 6.7% while UPRO, keyed to the S&P, is flat as is TNA, keyed to the Russell.

Among the leveraged sector ETFs, LABU (biotechs) is up 32%…32% in five days!

Notable Nasdaq stocks participating in the rally include AAPL up 2.8%, AMGN 4.4%, AMZN 4.8%, TSLA 6.9%, FB up 5.7%; the number-one stock in my nifty-fifty stock list, HIIQ is up 16.2% on this five-day run (one of these days I’m going to have to look that symbol up and see what that company is and what it does).

Anyway this is what market timing is all about.  I’m recording it her for my own amusement, and mine alone, but whenever anyone says it’s impossible to time the market I tell them to go back to school.

On the chart below that last green circle in the upper right indicates this rally may have more to go but again…”the twice as much” if not…

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#TrendTrading – Long but whipsawing?

TREND TRADE: Long from open, 1/4.

SWING TRADE: Long open, 1/4.

DAY/SCALP TRADE: Buying the dip…

PRICE TREND: Up 1 day.

SETUP:

Was expecting a price whipsaw Friday against a breadth downtrend.  Didn’t get it as the market went with the breadth indicator. Got the price pop today.

So what now?

Given that breadth and price are now in sync on today’s upside move would indicate an upswing is in motion, one that may turn into an outright rally for a while.

That is backed up by the SPY coming out of a nearly three-week pullback that managed to get it oversold (as noted in the post below), and once again 40 or more stocks were on sells in my nifty-fifty list for three days, no less.  Those three days have created a cluster almost always seen as swing lows and often at rally bottoms (see the chart below for previous 40-sell days and clusters).

Intraday price action was rather ragged today which should make one wary but it can probably be attributed to thin post-holiday trading.  All in all, except for the whipsaw in this post’s title, the upside now should have the least resistance.

The easy plays are as always the 3x-leverage index ETFs – TQQQ, TNA, XIV, UPRO — as sell as some sectors like SOXL, BIB, FAZ, and ERX.

Some notable stocks giving individual buy signals today for tomorrow open included GS, NAV, DIS, BAC.  One guess at a sudden jump might be NVDA, a screaming leader in the rally before the recent pullback and it is still in the oversold column.

Whatever…

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#MarketTiming – early warning signs…

One of the great things about market breadth is that over and over again it warns when a rally is weakening.  It usually takes more than one warning before a pause becomes a fall but…

Actually, it usually it takes three and we are at two early warnings now.

See the red circles on the chart below, both past and present.  And note how often they are the precursors for sell-offs to come. Sometimes this trading and investing is simpler than most analysts and Wall-Street players would have to common man believe.  But one must take heed.

Not saying this rally is over.  In fact, it is just the kind of rally (like the Brexit rally last summer) that can go on confounding bears and confounding indicators as it rides waves of too easy money, a seasonal bullishness, and like all bull markets the tendency to go up until it stops going up..

But the warnings are here now and beginning to repeat so this is becoming a time to take some profits or to tighten stop-loss points to make sure not too much is lost when a serious tumble finally takes hold.

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#DayTrading – signals…

TREND TRADE: Long from open, 11/9.

SWING TRADE: Buy from open, 12/14.

DAY/SCALP TRADE: Long.

PRICE TRENDS: TQQQ, up 1 day, TNA up 1 day, up down 1 day.

SETUP:

With short-term breadth once again turning up today within the long-term up trend, tomorrow’s open is again an opportunity to jump on this scary bullet train of a rally as it continues to whoosh by.

Stocks from my nifty-fifty stock list giving new individual buys today were FIVN, LSTR, TRMB, and TWI. Others of note giving individual buys signals for tomorrow included FB, CMCSA, AMZN (might be an option play) and NFLX (ditto the option play).

But virtually all index ETFs, even though overextended, are in play on the short-term breadth signal — TQQQ, TNA, UPRO — for day trades certainly, and possibly swing trades for more than a day.

Much of the prospect for success on this setup will depend on the Fed Reserve decision tomorrow and the market reaction to it.  Just saying…

UPDATE 12/14 close:

Yes, much depends on the market’s reaction the Federal Reserve’s rate hike.  And the reaction was down and as the market goes so go most stocks. Of the four stocks on buys today from the Nifty-fifty-list, one was up (barely) and three down for a loss of 1.2% on the entire basket. So it goes.

Mirror, mirror, what’s the fairest rally?

This is a follow-up to the entry below entitled “To Brexit Or To Exit”.

It was suggested the current rally would continue to mirror the immediate post-Brexit, rally as it has been doing week-by-week since the election.  That continued today as the market put another spike up right on time (see the bars in the red ovals on the right and the left).

If the mirroring is to continue the market should put in two more up days this week before beginning a long chop-chop, likely for the rest of the year.

And it was suggested the rally would likely resume today into the end the week.  That is still likely unless the Fed kills it with news tomorrow.

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#MarketTiming – signals…

TREND TRADE: Long from open, 11/9.

SWING TRADE: Sell from open, 12/12.

DAY/SCALP TRADE: Long bias, but possible short for day/scalp.

PRICE TRENDS: TQQQ, down 1 day, TNA down 1 day, UPRO down 1 day.

SETUP:

With SWING TRADE turning down Friday and prices on the index ETFs extended to 5 to 6 days up in a row the time has come to exit all longs on Monday’s open (ideally, but otherwise on any strength Monday).

The Swing Trade today followed through with a down day across the main leveraged index ETFs – TQQQ, TNA, UPRO.  Consequently, their opposite short ETFs  were up on the day trade with marginal gains on SQQQ and SPXS, but better on TZA at 2.48% from its open to close.

Should be noted that UVXY, the wild and crazy short ETF based on the VIX, was up 2.8% for the day.  UVXY is often a quick and easy way to scalp a down day in the averages.

For tomorrow there is still there is some possibility to trade the short side either for a scalp, or a day-trade or for an aggressive swing trade, but as bullish as the market has been of late, one may have to be nimble with hard-and-fast stops.

The TREND TRADE still up, so until proven otherwise this is primarily a pause before the next run-up.  It might be more prudent to stand aside as a swing trader and watch for the next up  swing.

These comments are a journal of my trading, presented here for entertainment purposes only and not to be construed as direct trading advice.

TODAY’S INTRADAY SCALP:

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#Stocks – to Brexit or to Exit?

I don’t quite know what to say about what’s going on this chart and in the market.

Except that, remarkably,  it appears we’re in a nearly perfect mirror image of the Brexit rally from last July.  Rally in the first week (the light green shading on the left), a one-day pause, another upside follow-through the second week including two upthrust bars in the third week, then chop for a week or so, and finally another multiple-day run up in the fifth week.  Repeat that exactly week by week in the light green shading on the left and we are at now.

So will we have those three up days in the light red oval on the left to fill out the light red oval on the right and then chop-hop our way through the end of the year to complete this “Repeat/Rhyme”?  Or are we on the verge of the whole thing going to slime?

Probably a lot could depend on the Fed, particularly the market’s reaction to the Fed Wednesday.

My guess…We go on tomorrow or the next day, and up into the end of the week…

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