7/14/2018 Still Holding All Cash. I’m getting ready to short QQQ again in the 182.5-184 range with a target in the 166-170 range.

QQQ Weekly 7_14_2018.PNG

I hope you have all had a nice weekend so far.  

I’m currently looking to short QQQ near 182.5 with a stop loss at 185.5.  My target area is the support zone at 166-170.  This is a risk reward of about 4-6 to 1, which is very good.  A potential risk is that the stop loss is too close, so if you don’t want to get whipsawed, you can take a smaller position size and have a wider stop loss.  The tradeoff is that your risk reward will be worse.  

Also, to protect profits, I plan to drop my stop loss from 185.5 to 182.5 if QQQ drops below 178.  

The main reasons for the short are as follows (in order of importance).

1: QQQ is approaching the top of trend line resistance, hinting that momentum will likely slow at that price as bulls get exhausted

2: There are massive RSI divergences on both the daily and weekly chart.  These divergences come from the fact that the RSI and the price direction are not agreeing.  Notice how the RSI is failing to get anywhere above 70, but in January, QQQ had an RSI reading of over 80. 

In sum, while the index continues to make new highs, the RSI fails to make new highs.  This hints at slowing buying interest.  

3. Volume is significantly higher on the down days/weeks, hinting that the big fish, or the institutions, are selling.  This is called “distribution.”  From the weekly chart of QQQ above, you can see lots of these distribution weeks.  

Also, MU and INTC have climbed a significant amount in the last week, but I am still waiting for a significant pullback to buy.  At this point, I might just stay away since I believe the semiconductor sector is due for a correction (10%+ drop).

Sunday 7/8/2018 Weekly Outlook. I’m all cash now, and although I covered my shorts on Thursday last week, I’m still bearish on stocks.

On Thursday 7/5, I covered my QQQ short position for a relatively small gain due to the fact that QQQ wasn’t dropping as fast as I was expecting (showing a lot of unusual strength).  Sure enough, come Friday, bears got slaughtered again.  I told myself on Thursday that I could short another move higher, which I am considering doing if QQQ retests the highs again.  

Since I also exited my SIG short position on Thursday as well, I’m holding all cash now.  For some reason, out of the 10-11 months I’ve been trading, Friday was the only day where I held all cash in both my regular trading account and my Roth IRA.  Perhaps I’ve been having an urge to always be in at least one trade at any given time.  

My top potential picks for going long are MU and INTC, with MU being my heavy favorite.  I’m also considering going long on BABA and the SOXX, a semiconductor ETF, which includes MU and INTC.  Of course, I’m waiting for another significant dip of >5% on MU and BABA before I would be buying aggressively.  

Like I mentioned last week, I think that because the financial sector is struggling to hold the support level, I believe we will likely experience a lot of downside in the coming months in all stocks, not just the financial sector.   

I’m looking to buy MU on any big gap down or a drop to the 46-50 support zone.   I’m looking to aggressively buy BABA in the mid/high 170s.  I will buy INTC on any retest of the previous low near 48.5.   There are a few other stocks I’m watching, like TAL and SGH, but these stocks aren’t as liquid and are quite a bit more volatile (which can be good and bad).  

TLDR: I plan to reshort QQQ if we retest the highs near 178.  I’m looking to buy the above mentioned stocks if they drop in the next few weeks.  

Good luck trading, and remember to have fun and stay happy! 🙂 


7/1/2018 I’m still bearish on QQQ for the next few weeks, and financials continue to struggle. MU and INTC are nearing a great price to buy at.

QQQ Daily 7_1_2018.PNG

I’m still bearish on QQQ for the next few weeks (and still have a short position from 175.35).  I will quickly exit my short if QQQ closes above 175 again (complete gap fill).  My target is still the 162-164 support area, which is about 4% lower.  

XLF Chart 7_1_2018.PNG

A large part of the reason why I’m bearish on QQQ and the market in general is due to the financial sector (chart above).  The XLF has retested the 26.5 low for the 4th time now, and I think we will break below support within the next two weeks.  

MU, INTC, and other semiconductor stocks look like a good buy.  SOXX tracks the semiconductors, so if you like the charts of MU, INTC and a few other stocks, you could just buy SOXX instead of the individual names.  

I’ve analyzed MU and INTC below.  I plan to take these two trades near the levels I’ve mentioned.  I will update you before next weekend if I take a position during the week.  

MU 7_1_2018.PNG

INTC Daily 7_1_2018.PNG



6/24/2018 Markets look extended. I’m looking for at least a 5% correction in technology stocks within the next two weeks.

At this point, I’m unsure if tariff news have much of an impact on the stock market anymore.  Although the initial news triggers selling, the dips seem to be aggressively bought up, at least for technology stocks.  

Either way, price action is telling me that technology stocks are overextended and thus, I’m looking for a 5% or larger correction in the QQQ.  Something interesting is that the S&P500 and Dow Jones outperformed the QQQ significantly in the most recent two trading days.  I don’t remember this happening in the last few months.  

To reduce risk, you can also consider a pairs trade.  You can short QQQ and buy SPY.  In this scenario, you are betting that technology stocks under perform the overall market.  

QQQ daily 6_24_2018.PNG

I added a short position on QQQ on Thursday after market close near 175.35.  My mental stop loss is at 178, and my hard stop loss is set at 179.  The rationale is that if this is the next move down, QQQ shouldn’t be hitting new all time highs.  Judging by previous moves down, if QQQ drops the same magnitude of 12%, QQQ would be trading at 156-157.  If QQQ drops into the 166-170 support zone, I plan to move my stop loss down to my entry point.  


SIG daily 6_24_2018.PNG

I’ve been eyeing this short position on SIG for a couple weeks now, and I finally pulled the trigger on Thursday last week.  SIG has been in a consistent downtrend, and has now broken out into a large resistance area between 58-60.  I’m banking on the fact that buyers are exhausted, and price will retest the 50-51 level.  The risk reward was about 4 to 1, meaning I could be right 25% of the time on these kinds of trades and still come out even.  


MGM daily 6_24_2018.PNG

I’ve taken a pretty large position in MGM at 30.  Friday’s action was quite bearish, but I’ll let the trade play out.  Somehow this price action reminds me of my trade on AA last week. 

My stop loss is at 29.15, with a target profit area at or above 33.5.  The risk reward is about 4 to 1 again.  


MGM weekly 6_24_2018.PNG

Here’s the same trade on the weekly chart.  As you can see, MGM is still in an uptrend, and has now fallen to the bottom of the trading range (support).  

Have a great weekend!

6/21/2018 Post tomorrow or on the weekend, but I’ve added a couple new positions recently.

Hi everyone!

The next blog post will still be on Friday or the weekend, but I wanted to let you know of a few trades that I’m currently in or likely will take. 

I’m going to be shorting QQQ with hard stop loss at 179 and a mental stop at 178.  My target is near 162-163, but I might take profits near 168-170 as well.  I don’t like shorting uptrending stocks, but everything is lining up nicely for a low risk short position here.  

I manually stopped myself out for a small loss on WB at 101.5 earlier this week, and added a large long position to MGM at 30.  I also added a short position on SIG today with a stop at 60.51 and target at 51.  

See you in a few days, and good luck trading!

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! 

6/9/2018 Market Review and Next Week’s Forecast. *Warning* Lots of material this post!

Market Stocks 6_9_2018.PNG

Greetings, and welcome back! 

I noticed I was spending upwards of 6 hours a day watching my account value go up and down during the day, so I needed to take a break from stocks for a week.  As a result, I couldn’t blog.  Counting gains and losses when they weren’t “lost” or “gained” yet made no sense and was extremely frustrating.  I’m currently trying to break that habit of wasting time watching intra-day fluctuations.  

I’m thinking of going back to the regular schedule of blogging 3 times a week (every other day).  However, I will likely do just one post next week sometime between Friday and Sunday, and take it from there.  

Anyways, back to stocks!  Most of the stocks hit my target a week ahead of time.  MSFT was about 30 cents off from my target intra-day, and DIA was the biggest laggard.  I think markets are due for a pullback here, so I flipped bearish for the next 2 weeks.  Please note that I’m not recommending to short sell, but perhaps trim some positions and wait for a dip to add more. 

I will update my targets sometime next week after I look at the price action.  

I’m glad to finally see the support zone bounce from WB and BRKB.  I don’t hold any BRKB, but it still looks like a promising pick if you bought in the 190-192 zone like I recommended.  A good level to sell BRKB at would be 200.  ANAB hit my stop loss on my paper trading account a couple weeks ago, but I wanted to mention that just in case you were wondering where that pick went.  Can’t win them all! 🙂

For WB, I added my initial position at 103.5 a couple weeks back, and then doubled my position in after hours yesterday (Friday 6/8).  To keep my risk the same, I’ve raised my stop loss up from 95 to 99.6.  I’m a little nervous that the stop loss is too close, but we will have to see what Mr. Market thinks about that next week.  My target is still the resistance zone near 130-140, and I plan to aggressively pyramid (averaging up) into this position if all goes well.  

Also, note that I’ve added a bunch of stocks that I’m currently thinking of buying.  You can find those under the “Watchlist Stocks” area in the image above.  The “Value Zone” is the distance between the 100 and 200 day EMAs on the daily chart.  I believe that is a good area to buy stocks at.  

Let’s look at some charts, and then wrap up.  

QQQ daily 6_9_2018.PNG

Above is the QQQ on the daily chart.  I’ve highlighted a strong resistance level near 170.  I suspect the market wants to retest that level, and then make a move higher.  Bulls do NOT want to see a close below the bottom of that rectangle (near 167), as that will signal that the Bears are in complete control.  From here down to support at 170 represents about 2.5% downside, which isn’t too bad.  


DIA analysis 6_9_2018.PNG

DIA looks similar to QQQ, but just significantly weaker.  Resistance is near 257, with support near 250.  I have no idea where price will move, but I favor a test of the 245-250 support zone first.  Of course, we could have good news next week and hit 257 within a day or two.  


SPY Daily 6_9_2018.PNG

SPY is at resistance right now.  SPY is clearly stronger than DIA, but weaker than QQQ.  I favor a retest of at least 275 in the next few weeks.  Any daily close over 280 is very bullish.  

IWM Daily 6_9_2018.PNG

The IWM, which tracks the Russell 2000 ETF (small cap stocks), is the strongest index of them all.  I have no idea what’s going to happen, but I would not buy or sell at this price.  If I was forced to pick a direction, I would say there’s a 51% chance it closes lower next week.  


Here’s a bonus chart since I haven’t blogged for a while.

WYNN 6_9_2018 Daily.PNG

Here’s a chart of WYNN on the daily chart over the last two years.  The blue line is the 100 day Exponential Moving Average (EMA) and the red line is the 200 day EMA.  The “Value Zone” is the area between those two lines (when the 100 day EMA is above the 200 day EMA).  WYNN has bounced off the value zone 6/8 times in the last two years (75% success rate).  Not only that, but the risk to reward ratio is excellent!  I will be aggressively buying if it hits 170.  I’ve learned to be more patient with my trades recently, but you could make a valid argument that now is a great time to buy too.