12-28-14 Trade Plan

Looks like this will be the last trade plan of the year, hope everyone had happy holidays to carry into the new year.  Markets are still holding up well hanging onto higher highs and lows.  It's still not clear which intraday trend is forming but right now it's looking like the 30m.  As long as we get the relevant swing points though it doesn't really matter.  I'll be watching for higher highs and lows to hold along the 30m trend this week as a benchmark in the Russell and NASDAQ.  Russell 2000 is still my favorite index heading into the new year and more Russell correlated stocks are making their way into the watch list.

Also we get new YTD break even levels on the first of the year so to me that's a fresh start for performance benchmarks.  I wrote a post on how I track/use it in the education page if you are interested in that.

12-21-14 Trade Plan

Since I last posted the markets have corrected to a key level at $100 on the QQQ, held the level, and now working on a v shape reversal.  This isn't surprising to me at all given how far away the previous daily swing point was at (10/15).  It gave the bulls a lot of breathing room to put in a higher low and that $100 level was begging to be bought by institutions.  Now that they have done it we need to see it hold and continue with an intraday trend.  The Russell has quickly become my favorite index on watch after the false breakdown below key support and YTD breakeven into the 50 day and swift bounce breaking above $118, which was already a trigger level I have been watching for weeks.  If we get an intraday trend going here above $118 then there is a great probability we have liftoff to new highs.

12-07-14 Trade Plan

The market continues to uptrend very strongly and stocks continue to be in a good environment.  Obviously this kind of straight up action in the indices cannot go on forever but it can go on for longer than most think it can and pretty much already has.  If the indices start to loose the momentum they have had the swing points will signal that when the time comes.  For now they remain in an uptrend and there is no evidence to the contrary.

11-30-14 Trade Plan

It's a great time to know how to follow trends.  Just look at the dollar, oil, gold, stocks all holding strong trends.  Oil falling out of bed was not random, it has been in a strong downtrend (objectively measured by the 65m time frame) for 4 months now.  Some call it capitulation or reaction to whatever news came out, I call it still in a downtrend.  Nothing has changed, until oil breaks it's 65m trend with in tact swing points there is a downtrend.  Same with bonds, the daily chart has been the backbone trend for this all year long.  Every intraday trend that got started had the daily chart behind it with higher highs and lows and a rising 50 day moving average, nothing has changed there and now we see a new intraday trend getting started.  Surprising right?

The point is a) don't fight trends b) have an objective measuring system c) keep it simple.

11-23-14 Trade Plan

Once again the markets held the up trends.  The only market having a bit of trouble is the Russell 2000 as usual but it is holding above the key support level at $115.  The others are all holding in a consistent 30 minute time frame trend with higher highs and lows.  There is just no arguing with it, also we still have fresh setups triggering with a good environment for stocks.  This slow grind higher through November in the indices has been the rising tide for stock setups and it continues for now.

11-16-14 Trade Plan

The markets had another week of up trending and stocks continue to push higher.  Specifically the NASDAQ is moving higher with the S&P and Russell having a week of consolidation.  We are still in a good environment for stock setups and still in a place of pushing winners and taking new signals as they come.  Like I said a few weeks ago this whole rally has been triggering lower time frame trends (which means quicker, more powerful trends) and they have been sustaining longer than most expect.

This is one of the reasons why I believe finding the time frame the trend has been/is being established on and just following the swing points is so effective.  It takes away any analytical emotion or uncertainty that may arise and leaves it up to you to either follow your rules or not, if that makes any sense.  That also includes removing any "fun" you may have trying to put the puzzle together with trend lines, fibs, overlays, chart patterns etc. and leaves you with much more consistency in my opinion.

11-09-14 Trade Plan

The market had a tight consolidation this week while stocks in good up trends continued higher.  Tuesday the NASDAQ and Russell put in a swing low against the 30 minute trend and it ended up being the holding point for the consolidation that took place.  Not putting in lower highs and lows allowed for stocks to continue to trend and trigger moves higher.  The S&P was steadily moving higher during the consolidation period in the NASDAQ and that likely prompted some strength in individual names as well.

11-02-14 Trade Plan

The 15 minute trend is still carrying this market with ease and that is typical in most of the sharp reversals we have seen during this 2 year rally.  The only index entries that you could have taken is against the 15 minute trend using one of the higher swing lows as a stop.  However this action in the indices is setting a good environment for stocks which is allowing more setups to trigger and actually follow through.  Whether or not the index is extended really doesn't matter, it's more important to be looking at setups individually.  Stocks can still trigger and have great trends while the index is just consolidating or even pulling back slightly.

10-26-14 Trade Plan

The market did exactly what I didn't think it was going to do, a strong V shape reversal back to the highs.  At first there were not many opportunities being triggered but towards the end of the week things were starting to be put in motion.  This part of the move that we've already seen is a part I didn't mind missing at all.  To have participated in that move you would have had to be picking at a bottom after a daily chart lower low looking for a short term intraday trend (15m it ended up being) to hold and carry the market against the bigger trends, and as beautiful as the reversal ended up being that just isn't my style and I would come at it the same way if it were to happen again.

10-19-14 Trade Plan

With lower highs and lows the market did what it does best in downtrends, make bigger moves lower than it does higher.  The volatility is bringing back a lot of very short term opportunities in both price directions and the actual volatility of the options.  Getting in some puts or any long IV/short delta option positions before a nice one or two day decline can really pay off especially if you have the timing required to trade the weekly cycles.  Bonds and volatility ETFs were trading great this week and after a few weeks of lack of opportunity with long stock positions it was good to change focus and make money with it.

In my opinion we are past the point of V shape straight back up reversal, this is going to take at least a month or two of chop and consolidation if we are going to reverse back up.  Which would make sense as the market waits on the only fundamental piece of information it cares about, whether or not we see more QE.  That consolidation could happen at these levels or it could happen 10% lower, as long as you are following major swing points and trend you know which direction to expect the big moves and where to define your risk if you want to trade it.

10-12-14 Trade Plan

The bears prevented any higher highs/lows and kept the selling going with a 130m down trend.  More volatility is here and that requires different trading styles than riding up trends or none at all.  I like doing end of day index trades where risk reward is good for a one or two day trade.  Also trading bonds, oil, gold, volatility ETFs, even some shorts if there's a good setup in the liquid stocks I trade.  I'm always weary of pulling out this style of trading because it seems like when I do or think about doing it the indices reverse and it's time to get long stocks.  But it does exist, and with QE ending, IWM breaking down in a serious way, nearly all bullish setups failing, it's time to put that card on the table.

10-05-14 Trade Plan

What we have in the indices is intraday down trends going against the daily uptrend and I prefer to have both in alignment for a good uptrend.  Even with the strong V shape reversal we saw on Thursday and Friday, it is still a lower high after a lower low.  Bulls could do one of two things if they are taking control from here, take out 9/30 high which would make a higher high and give lots of room for higher low or put in a higher swing low above the 10/2 swing point.  If bears are still in control they will keep the pattern of lower highs and lows.

09-28-14 Trade Plan

The indices are still chopping around and small caps are under performing pretty bad.  The Dow failed in trying to lead the market higher but is still holding up better than the S&P and the NASDAQ is holding up better than all of them.  So that keeps my focus on the NASDAQ and the Dow.  But no matter what is looking better on a relative basis I still need to see higher highs and lows on an intraday trend to be more aggressive in taking positions and looking for leading moves.  We don't have that yet, let's take a look at the 130m charts.

09-21-14 Trade Plan

The indices are holding up well with now the Dow Jones leading the way higher.  I don't exactly love trading the Dow and Dow stocks but you go with the flow of the market.  If the Dow wants to try to be the "surprise performer" for a little bit then so be it, I'm willing to give it a shot and trade some good setups in large caps.  Especially when setups were starting to dry up in tech stocks as I was saying last week.  The Russell is still a mess and did end up breaking that $115 level, which put it in negative YTD again and told me to move on.  NASDAQ isn't in a bad spot here, breaking last weeks high could trigger a new leg up and that's something I'll be watching for along with the Dow move that is in progress.

09-14-14 Trade Plan

For the NASDAQ this was the third week in a row of nothing happening and the Russell is having a lot of trouble holding up.  This week there really isn't anything to talk about, not many setups and choppy action in the indices.  That makes me not want to trade much and pull back money.  My trading style is aggressive when price is moving well and retreat when things aren't going smoothly.  So lets look at where we are at.

09-07-14 Trade Plan

All we got this week in the indices was some chop within the up trends on the daily/130m time frames.  While this chop is taking place we are seeing some new stocks setting up and some old stocks falling out, which is exactly what you want to see for some trend continuation.  We still haven't seen any weakness in the indices and with Friday's low I think we have a defined area that if broken will show weakness.

Two notable names this week that saw some heavy selling, both huge winners this year.  GILD and AAPL.  This is why you have to use your stops in relevant areas to get you out when swing lows start breaking.  Both of these were in 30 minute up trends and holding every single swing low along the way, the signal to get out of the way for me was when the swing low couldn't hold.  Simple as that.  All you need is relevant price points and you can make quick effective decisions.

08-31-14 Trade Plan

We had some sideways price action this week within the larger up trends.  The week finished out re-asserting higher highs and lows in the 30 minute trend after some chop during the week.  This move we are in is incredibly strong especially in the NASDAQ and the NASDAQ stocks are trading like a dream.  We don't know how long these trends are going to hold, all we can do is follow the trend and use swing points to manage risk.  The Russell is also holding a 65m trend very well and is still in a pattern of higher highs and lows.  Next higher high would require breaking $117, or last weeks high.