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I don’t know what happened today, but something seemed to spook the market, and I saw quite a few really nice long setups break down. In fact, in my scans tonight, for the first time in a while I saw twice as many short setups as I did long setups. This market is funny, and that doesn’t mean there will be downward follow through tomorrow, but I almost got bit today and I wanted to share my reservations with everyone here. I looked at the indices, and they really don’t look that bad. The S&P is still in a sideways range, and the NASDAQ is actually bullishly basing at a previous high, but I saw what I saw today and it wasn’t pretty. If you daytrade, or if you’re thinking about entering any swing trades tomorrow, I would advise waiting for a little confirmation before jumping in. Good luck with your trades.
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Here’s an example of one of the short setups I found tonight. I’m going to be watching this one closely tomorrow for a continuation in selling.
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Only thing I saw today was the announcement by the US of steel and aluminum tariffs against Canada, Mexico and the EU and their announcement that they will (may) retaliate. Hard to say what anyone can do about these kind of things, e.g. if the Korean summit goes ahead on June 12 that should help the markets, if not it will probably hurt. But how can one predict? It appears that the president's "art of the deal" is to hit 'em hard right off and then back off (maybe). As long as that is his M.O., if it is, methinks these kind of surprises are almost inevitable. Certainly complicates short term trades.Originally posted by BlueWolf View Post
Should add the problems with Italy. Another wildcard.Comment
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Well, having said all that, what happened this morning? The entire market gaps up and I haven’t taken a single short position. This is a crazy market.Comment
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I’ll tell you, Louetta, it’s times like this that I’m glad I’m daytrading. I scan for my setups at night, and then I watch the open to decide which ones look like they are developing. As I said, I had twice as many short setups this morning, but didn’t enter one. I did take three longs, and I’m out of two already with quick profits. I know I’m probably leaving money on the table, but when I hit my daily goals, I take it and I don’t look back. This is such a news driven environment, it’s very difficult to successfully hold onto positions unless you are very patient.Last edited by BlueWolf; 06-01-2018, 10:36 AM.Comment
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Blue Wolf, I just can't trade a market that alternates 300 up and 300 down days. Except for old holdings that I'm glad to dump on a big up day. Mostly holding boring dividend stocks in IRA's that are largely unaffected. Two years ago I'd be thrilled trading some of these great setups.
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Agreed, BillyJoe. I hold longer stocks in my IRA too as I’m more of an investor with my IRA. 2017 was a great year for holding, but 2018 has been a roller coaster. I was swing trading in my main trading account for a while, but lately, I am day trading and scalp trading. I will sometimes hold a day trade overnight if it doesn’t roll back too hard during the doldrums and closes well, but that has been infrequent of late.Comment
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I wanted to share that I think the climate is getting better for swing trades, lately, and I have been emboldened to hold a few overnight. I included a VIX chart that shows how overall volatility has been dropping and yesterday dropped to a low not seen since January. I would pick and choose your trades carefully still, but there’s definitely money to be made on swing trades lately. I like two types of swing plays right now: 1) Bullish momentum and 2) Climatic selloffs (playing the bounce). I still love basing patterns too, but I view those more as day trades as you have to be very patient sometimes waiting for the base to break out.
VIX:
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I thought I’d share an example of the kind of basing pattern I like to follow for daytrades. It broke out today and made an excellent trade. If I had bought it while in the base as a swing trade, I would’ve had to sit through a number of days waiting for a break out and hoping it didn’t go the other way, a mistake I’ve made way too many times.
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Blue Wolf. Thank you for the explanation on SWKS. Interesting and helpful with the chart.
Any take on LRCX and the sell off it experienced today? The stock dropped >10% today (to $188 range; below 50 and 200 day moving averages) due to one (1) analyst's comments who maintains their price target of $300.
I have longer terms in focus and saw this as a buying opportunity but wondering what a technical perspective's take may be, if any.Comment
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Another example of a basing pattern. Remember SRCL? I mentioned this stock a while back, and it is still basing. I’m personally not inclined to swing trade this one because it has been basing so long, but I keep watching it for a possible daytrade. It’s fooled me a couple of times, and I stopped out, but I thought it might be interesting to look at the chart.
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That drop was definitely news driven after an analyst at Evercore warned about risks to their 2nd and 3rd quarter shipments. I looked at the chart and marked it up with my thoughts as to how this news affected it technically. I don’t necessarily think it’s going a lot lower unless the current level of support doesn’t hold. The bounce off that support today, however, was a good sign that it might at least be able to hold its current levels. We’ll know more tomorrow after we see how it opens, and then how it follows through over the next several days. It seems like a decent company, which means it will eventually climb its way back up. The biggest problem you’re facing is that there is now significant resistance in the $200 area that will slow any ascension through that level down. Your best bet would an earnings beat that gapped it above that resistance level. I will keep my fingers crossed.Originally posted by tiedyed1 View Post
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So far, it looks like the support for LRCX is holding. That was a nice bounce today. In fact, I will be watching for a daytrade on Monday. Hopefully it will recoup a lot of that gap down for you.Originally posted by BlueWolf View PostComment
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Thanks for your take on LRCX. When I see drops that were caused by 1 analyst's comments regarding short term possibilities, and that same analyst kept their $300 target, I see opportunity. (Hopefully the company is taking advantage of it too with its scheduled massive buybacks as well.)
As I am not a day trader I added Jan 2020 calls on Thursday which gives me plenty of time for the stock to retest 200 and eventually hopefully break out. The company is fundamentally looking very strong over the long term, while it does incur swings in the volatile chip sector.Comment
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