Tag: SPY

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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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. 

5/30/2018 Markets recover yesterdays losses. It looks like a bear-trap for the QQQ, DIA, and SPY.

Fun Fact #55

A 529 plan is a college savings plan where money is put in post-tax, and then the account grows tax free!  This is similar to a Roth IRA.  

 

Market Stocks 5_30_2018.PNG

My targets have been slightly modified for June 15th.  I am still bullish (more so than before), but if we do break below this minor breakout support level, I will quickly turn bearish for the short term.  

Today’s price action completely wiped out yesterday’s losses.  Since DIA and SPY broke through support yesterday but bounced back today, I think we have a potential bear trap.  Any more upside will result in a lot of shorts panic covering.  I think we might first move sideways or down a bit, then reverse higher next week.  

 

DIA analysis 5_30_2018.PNG

The rectangle shows the consolidation zone, with DIA breaking down below support.  However, notice that price has snapped back into that rectangle.  I predict we break upwards of the rectangle, but it would be advised to sell if it breaks below the bottom of that rectangle again.  

 

SPY analysis 5_30_2018.PNG

The SPY chart looks like the DIA chart, so I’m also expecting an upwards break of the rectangle.  Again, another break below 270 is bearish so that might be a good time to sell. 

 

QQQ 5_30_2018.PNG

QQQ is still the strongest of the three major indexes.  It is currently running into overhead resistance near 170.  

 

IWM 5_30_2018.PNG

IWM is the strongest index by far, and has made a new all time high today.  I would consider buying in the 158-160 support zone (breakout location) highlighted above.

5/27/2018 Weekly Charts of the Indexes

QQQ Weekly 5_27_2018.PNG

Above is the weekly chart of QQQ.  Notice that QQQ has run into overhead resistance at about 170.  The daily chart has formed a bull flag, which hints that a break above 170 means we run to 178-180 in a couple weeks.  As of 8 PM Mountain Time (10 PM Eastern Time), futures are up quite a bit, so I’m expecting a strong up-day on Tuesday.  

The concerning thing on this weekly chart is the negative RSI divergence.  Notice how we’ve made a higher high in March, but the RSI did not make a new high.  Currently, the RSI is only at about 60, and we are approaching a new high again.  As a bull, I wouldn’t be concerned unless QQQ breaks below 155.  If we break below that, I’ll be mostly looking to short sell 🙂

 

SPY 5_27_2018 Weekly.PNG

The SPY is a bit weaker than the QQQ, but is still holding up nicely.  Bulls want to see a breakout above 280, and bears want to see a weekly close below 260.  My bet is that if SPY drops to 260, we will have a lot of panic selling as I think that support level won’t hold.

 

DIA analysis 5_27_2018 Weekly.PNG

The DIA looks very similar to the SPY.  I think if DIA breaks and closes below 235, we will see a lot of panic selling.  Perhaps we could see a drop to something like 220.  Bulls want to see a weekly close above 253.  I think there’s a better chance we move up and break above 253.  

See you Tuesday after the market closes! 

5/22/2018 Markets close a bit lower, MU spikes on Intel deal and 10 billion dollar buyback news. Watch out for Fed meeting tomorrow!

Fun Fact #53

MU announced a buyback along with an Intel deal day.  As a result, MU surged despite the entire market being down!  Read more here. 

 

Market Stocks 5_22_2018.PNG

Note that the above price changes are for the last 2 days.  I am still bullish.  

 

QQQ 5_22_2018.PNG

I think QQQ has made a bull flag pattern.  This pattern is formed when the price goes up vertically and then consolidates.  I’ve drawn the flag on the chart above.  The target if QQQ breaks out above 170 is the length of the flag pole, which is about 8-10 dollars depending on how you draw the flag.  That means QQQ could reach 178-180 within a few weeks after breaking out over 170.   The only concern is that the move upwards wasn’t on significant volume.  

 

DIA analysis 5_22_2018.PNG

DIA, like QQQ, also looks quite strong.   Since DIA broke out above the resistance level near 247.5, I think there’s a good chance DIA will bounce upwards from the 245-247.5 support zone.  I’ve highlighted that support zone in the chart above.  Also, please note that the volume on down days is significantly lower than on up days, signaling that buyers are still in control of the price action. 

 

SPY 5_22_2018.PNG

The SPY is doing the same thing as the QQQ and DIA.  It is currently taking a break after a strong upwards move.  I think the odds favor a breakout upwards, but if SPY closes below 270, I think we move significantly lower.  

 

BABA 5_22_2018.PNG

Speaking of bull flags, here’s the chart of BABA.  Notice how BABA had a vertical move up on huge volume, and is now consolidating.  The volume has decreased significantly as well which is a great sign.  A break above 200 signals a lot more upside.  The length of the flag pole is 30, so if BABA breaks out above 200, the measured move up would be to a price of 230.  I analyzed the weekly chart of BABA in a previous blog post, and the chart also hints that a break above the 200-205 resistance level signals a lot more upside.  

Thanks for reading, and I will see you Thursday!

5/20/2018 A Look at The Major Indexes From a Weekly Perspective

I hope you are all having a great weekend so far!  

I looked over the 2000 and 2008 market crashes and found something in common with their charts.  The major indexes failed to make new highs for an extended period of time, like a few months, and then proceeded to break a key support level.  The “crashes” were all very slow grinds downwards, and the charts gave lots of warning signs.  

I will show you the key support levels on the major indexes below.   

QQQ Weekly 5_20_2018.PNG

If QQQ breaks below 155 on a weekly close, this raises some concern for the bulls.  If we close below 150 on the weekly chart, I expect an additional 10% drop within the next few months.  Also, the MACD indicator will flash a sell signal if the lines cross below the middle 0 line.  We are still far above 0 right now, so there’s no reason to doubt the uptrend if we look at the chart alone. 

 

SPY weekly 5_20_2018.PNG

Here’s the SPY with the support level in the 250-260 range.  I suspect that if we test the bottom area of the range again, we will probably break down below it.  Watch out below if the SPY closes below 250 on the weekly chart.  

 

DIA analysis 5_20_2018.PNG

The DIA has a support zone from 230-240 on the weekly chart.  Again, a close below 230 would signal a lot more downside.  

See you Tuesday!

5/17/2018 Markets close slightly lower. China trade talks in focus.

Fun Fact #51

Nicolas Darvas turned $36,000 into more than $2.25 million in only three years.  His strategy involves trading breakouts from the “Darvas Box.” 

 

Market Stocks 5_17_2018.PNG

 

SPY 5_17_2018.PNG

The SPY is still above the 270 breakout location, so I expect the index to move higher. 

*Updates on the blog will be more infrequent due to time spent writing the stock book.  Thanks for your understanding 🙂

5/16/2018 Markets post modest gains, and the Russell 2000 index (IWM) breaks-out to a new all time high. I think that WB is still a very good buy at these levels.

Fun Fact #50

Xiaomi, a popular Chinese phone company, recently filed for an IPO (they haven’t gone public yet).  Xiaomi made a loss of 43.9 billion yuan in 2017, but will still be valued at 100 billion.  Read more about Xiaomi’s IPO filing here. 

 

Market Stocks 5_16_2018.PNG

 

I’ve updated my targets for June 1st, 2018.  As you can see, I’m still bullish since we didn’t close down today.  If stocks were to fall, I think they will go down a lot.  From my “If Wrong” targets, you can see that I would not be a buyer of any of the above stocks (other than WB) due to the relatively low potential upside and large potential downside.  In sum, I am not buying any of the FAANG stocks unless they drop a bit lower, like 5% for example.  

I still like WB at current price levels because the stock is in an uptrend and offers a low risk, high reward trade.   

 

SPY 5_16_2018.PNG

The SPY didn’t close down today, so I am still bullish.  The other indexes also went up quite a bit.  Although I am not buying or adding long positions at these levels, I will continue holding.  

 

NVDA 5_16_2018 Daily.PNG

Nvidia (NVDA) is getting to a price level where it might bounce upwards and hit a new all time high.  Although I’m tempted to buy right now, the current price doesn’t offer a good risk to reward.  Thus, I’m waiting patiently for the price to drop to the 220-230 zone before buying.  I don’t think NVDA will drop that far, but if it does, I’ll be buying with both hands. 🙂  

5/15/2018 Markets sell-off, but sees a lot of buying near the close. The S&P500 and Dow Jones are at the pre-breakout level. If these indexes move lower tomorrow, we will likely go even lower.

Fun Fact #49

A company may choose to give out a stock dividend instead of the standard cash dividend in order to save cash.

 

Market Stocks 5_15_2018.PNG

 

WB Daily 5_15_2018.PNG

I bought some WB at 103.5 today because I think the 100-105 support zone will hold.  My stop is at 95, and my profit exit is at 135.  That’s a risk reward of 4 to 1, which is a very low risk trade.  

 

SPY Daily 5_15_2018.PNG

SPY broke-out above 270-271, and is now retesting that level.  I suspect that if SPY closes down tomorrow, we will continue lower due to the false breakout.  

 

DIA analysis 5_15_2018.PNG

DIA also broke-out from the 246-247 resistance level.  Much like SPY, I think that if DIA closes lower tomorrow, we will continue lower due to the false breakout.