6/16/2018 Weekly review and next week’s forecast. I found some more pullback setups!

Market Stocks 6_16_2018.PNG

I’m bearish in the short term (next two weeks), and you can see that reflected in my targets for June 29th.  I hate fighting the trend though.  Even if we move up, I expect very muted gains (no more than 3% higher). 

I’ve added three more stocks to the watchlist.  I’ve added a long position (at $46.9) on Alcoa Corp (AA) with 2% risk to my account instead of my normal 1%.  The stock checked off every single box I had on my trading plan. 

For reference, I’ve only found two other trades in my 10 months of trading that checked off all the boxes.  Those two trades were MU trading at 47.4 and BABA trading at 167.  I exited those positions recently near 59 and 206 respectively.  

Unfortunately, AA immediately dropped 5% the same day I bought it.  Sometimes you find the “perfect” setup and trade everything according to the plan, but the trade still goes against you.    

Let’s look at my analysis of AA, and then we will look at the major indexes. 

AA Trade 6_16_2018.PNG

Here’s the AA trade that is in my trading journal.  It’s a little bit more messy than my normal entries, but hopefully it’s easy to understand.  RR = Risk Reward, SL = Stop Loss. 

If we snap back above 47 in a couple days, that would signal a false downside breakdown and I will probably be adding to this position and raising my stop loss up.  

 

QQQ Daily 6_16_2018.PNG

I mentioned last week that I expect QQQ to retest at least 170, which I still think is the most likely scenario.  It might take 2-4 weeks for that to happen since volatility has died down. Thus, I am not adding any long positions and will be buying QQQ in the 167-170 zone with a reasonably tight stop loss.  

I have not changed my opinion on the other indexes (DIA, SPY, and IWM) since last week.  

If the markets drop, I expect DIA to test 243, SPY to 272.5, and IWM to 163.

Thanks for reading! 

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