03-08-15 Trade Plan

Starting on Monday, we had a break out that proved to be a head fake when the swing low was broken the following day.  This was a break out that I talked about last weekend too, but the swing low couldn't be supported.  The next few days we chopped in between the breakout support/resistance and the immediate support zone around $108.  Then Friday sellers took price below the support zone and got some momentum behind them.  That leaves us where we are now, in no man's land under the $108 area.  Here is a visual on that: 30m NASDAQ chart

Why is it no mans land?  Because on the daily chart the last swing low that was put in was way back at $100 support and the last swing point was a higher high in the long term uptrend.  That means bulls have room technically all the way back to $100 to put in a swing low and continue the uptrend.  We don't know where that will be we only know how the swing points are trending.  The higher they can put in a low the stronger they are, and that's when I look for a potential support level they may want to step in at.  Currently that's the previous break out area around $106.  So from $108 to $106 even down to $103 break even area is no man's land because the ball is in the bulls court long term but sellers are in control on the intraday time frames.


How am I using this information?  Well I'm not loading up a long portfolio of stocks in hopes of this swing low coming to fruition, and I'm not shorting a portfolio of stocks to play the down move in an uptrend.  I'm day trading the indices in this no mans land, preferably catching some of the nice down moves that can happen with sellers in intraday/immediate control (like we saw Friday) but trading both sides depending on the price action.  That doesn't mean sitting in front of the computer all day firing off trades, it just means my mind is more focused on day trading opportunity if it presents itself (meaning 5m or 1m time frames, same process) until my swing trading process comes back into play.

The reason I talk about this is because the watchlist really isn't too important until buyers retake control of the uptrend or they just loose all control and a downtrend takes place, meaning lower highs and lows on the daily chart.  It stays updated but my focus is on day trading the indices and managing the trades I have left over from the rising tide we just saw over the past few weeks (which isn't many).  Whether or not I'm day trading, this is the part of my swing trading process where I am patiently waiting for new setups and waiting for the health of the indices to recoup.

So this brings me to the last point I wanted to bring up just about the blog.  The watchlist analysis posts are something I'm only going to do when the watch list is relevant which is not right now.  When you see those posts that means my focus is there.  I've realized lately that I want my process to include the skills I developed and retained as a day trader, a balanced approach for swing and day trading the market when that's what the market calls for.. that could be another post in itself.  I have passed on a lot of opportunity because "I don't day trade anymore" but that is just non sense.  I have the skills for it so I am integrating them into my overall trading process.  Just part of growing I suppose.  Thanks for reading as always

-Michael