Click on chart to see full Twitter thread:
$SPY #Options #DayTrade – Friday's 286 pup at 2.92. up 23%. Trailing stop. pic.twitter.com/XSFCmpUYBr
— The God of Trading (@TheGodOfTrading) May 9, 2019
$LYFT gets no lift on first earning report since IPO
LYFT, the ride-share biggie, is a perfect example of not buying into the hype surrounding an IPO.
LYFT came public on 3/29 and dropped almost immediately in on its opening bar, then gaped down the next day (see the charts below). Eventually, it settle down to move sideways until…today. It’s earnings report was terrible, losing $9 a share, more than a billion dollars, despite an increase in revenue and market share. And it had to announce on a day when its drivers are on strike with its biggest competitor coming public Friday.
The stock dropped nearly 11%
If one is an investor, none of this should matter. As outlined in this link below, investors should not even be long the stock until all fundamental and technical finally shake out, if they ever do. (Keep all this in mind also for the upcoming UBER IPO.)
These IPOs are difficult to short in the initial stages, but traders on biggies like LYFT have options to play with. LYFT’s options came to market five days after the stock’s IPO day (see the charts below). And there is where the downside can be played. The LYFT May monthly 75 puts bought on its own “IPO day”, using the same criteria outlined for the stock in the link above,is now up approximately 150%.
Now that is uplifting.
(click on the chart for a larger view)
$SPY – the slide from the top continues…
MARKET TIMING SIGNALS FOR 5/8/2019.
Long-Term Breadth (NYSI): SELL FROM 5/6.
Short-Term Breadth (NYMO): SELL FROM 5/6.
Price: SELL FROM 5/6.
Nifty-50-Stock-List: 18 BUYS, 3 NEW BUYS, 7 OVERBOUGHT; 32 SELLS, 1 NEW SELLS, 16 OVERSOLD.
CNN MONEY’S “Fear and Greed” Index: 41, FALLING, FEAR LEVEL.
Bellwether Stocks: 5 UP, 10 DOWN.
OF NOTE SPY OPTIONS:
SPY CALLS AND PUTS, BOTH, were down on the day as a tight sideways chop all day slammed premium for Friday’s expiration on both sides of the market. (See the charts below for how bad it was.)
The most nimble of options traders could make money, at great risk, buying the yellows And selling the blues on the charts below, but not much. The not-so-nimble could lose a lot.
WHAT:
It appears the market has been moving on Trump tweets. That is as absurd as it can get since he should not be tweeting about any of this and the market shouldn’t be paying any attention to any thing he tweets. The New York Times broke a story on ten years of his tax returns during a time he lost more than a billion dollars, all of the money his father gave him a lot more. Surely, one of the worst businessmen in history but a major-league con-man. His beloved Twitter has hung #BillionDollarLoser on him.
If the market focuses more and more on the Trump administration turmoil in Washington, it is likely to unstable for some time.
WHAT’S NEXT?
All sell signals remain in place – as usual this is a market can can go down as long as it wants and turn up any time. That sharp drop in the calls and the rise in the puts in the last twenty minutes of the day on the 10-minute charts below may hint there is more downside to come right away tomorrow but news, like a trade deal with China, can intervene.
This is a dangerous time for short-term traders. On the longer term, every bear market begins (or resumes) on a single down day and that day was six days ago to start this current slide.
(click on the chart for a larger view)
#IPOs – when “dummies” should take the trade
And on the second day of trading an IPO, dummies discover why they should never buy on the first day of trading.
This is based on suggestion in this post:
Don’t mean to use the term “dummies” in a derogatory fashion but sometimes it’s hard not to.
Over and over again, unless one is a real insider or being bribed for doing something else, or running some money-laundering scam that’s beyond me, anyone giving in to the hype surrounding an initial public stocks offering and buying before seeing which way it is going when its first day is done is plain and simple a dummy.
As said the link, this is one of the easiest trades in the market if one has persistence to follow an IPO and the discipline to wait for it reveal its direction before buying. Initially these stocks are difficult, if not impossible to short, so we’re talking only the long side here.
The keys to taking a position in a recent IPO are the high and the low in price on the first trading day (its “IPO day”). It is a buy on a close above the high of the IPO day. After the buy the high of that day becomes the stop loss level or the low of the IPO day becomes the stop-loss level depending on any individual trader’s or investor’s risk tolerance.
The trade is as simple as that.
See the chart panel below for examples. The top row of charts are recent successful IPO investments using this system. Each is set at a $10,000 investment to show both the money and percentage gains (the white flags on the lower right of each chart). As of today’s close, SWAV is up 46%, PINS up 11%, ZM .98% and SOLY up 133%.
In the bottom row are four IPOs from Friday which should not be in anyone’s portfolio…not yet at least – these second days are, as I said above, when dummies learn they never shoulda never bought any of these Friday.
Going forward, RRBI will be a buy above 58 and not before; SCPL above 18.75, ATIF above 5.10, and YJ above 18.20.
Simple as that.
(click on the chart panel for a larger view)
$SPY – market tries to reverse Trump tariff sell-off
MARKET TIMING SIGNALS FOR 5/6/2019.
Long-Term Breadth (NYSI): SELL FROM 5/6.
Short-Term Breadth (NYMO): SELL FROM 5/6.
Price: SELL FROM 5/6.
Nifty-50-Stock-List: 27 BUYS, 4 NEW BUYS, 13 OVERBOUGHT; 23 SELLS, 11 NEW SELLS, 5 OVERSOLD.
CNN MONEY’S “Fear and Greed” Index: 56, FALLING, GREED LEVEL.
Bellwether Stocks: 1 UP, 14 DOWN.
OF NOTE SPY OPTIONS DAY TRADES:
SPY CALLS, 5/6 288 UP 71%, 290 UP 120%, 291 up 190%. No put trades.
OF NOTE:
Fourteen of the bellwether stocks (AAPL, TSLA, NFLX, TWLO, AMD, NVDA, QCOM, GS, GOOGL, BABA, MSFT, FB, FSLR, AMZN) were up from the open although down on the day; and one (WYNN) was both down for the day and down more from its open.
WHAT:
The futures market sold off hard overnight on the news Trump threatened new tariffs on Chinese imports, then rebounded immediately at the open on the news that the Chinese negotiators planned to come to the U.S. to talk as planned anyway. The market was poised to go higher, prior to Trump’s announcement but the news cut short the buy signals across the board on Friday’s gains.
Can’t do anything about news, either positive or negative, except to go with the flow as it unfolds – in this case for day and swing traders it was a buy on today’s open and turned out to be quite a remarkable bounce back. Fourteen of the bellwether stocks were up from the open despite remaining down for the day. The $10K day trading system, had today’s 290 calls (in the money, ten minutes into the market) up 120% or the day, and just out of the money 291 call up 190%.
WHAT’S NEXT?
All technical signals I follow gave sell signals today for tomorrow open as the one-day blip up in long-term breadth ($NYSI) Friday retreated today on the tumble in short-term breadth ($NYMO); the price buy for today’s open, which racked up 4.5% on TQQQ and 3.7% on UPRO on the close, will be a sell on tomorrow’s open. In addition, CNN’s Fear and Greed Index dipped today while still at a greed level, and volatility surged (VIX), both negatives for the market.
Sell signals are sell signals but what’s next is tricky given the velocity of today’s rebound (see the candle on the SPY chart below), but it did not quite reverse completely and it may have used up immediate buying power to get to where it got on the close. If so, chances are it reverses again to the downside tomorrow. The key will be play the open, preferably with either calls or puts, while looking to lock in profits on today’s gains on TQQQ and UPRO and any of the bellwether stocks.
(click on the chart for a larger view)
$SPY – engulfed by a bear in a grove of black candles
MARKET TIMING SIGNALS FOR 10/17/19.
Long-Term Breadth (NYSI): SELL FROM 4/17.
Short-Term Breadth (NYMO): SELL FROM 4/15.
Price: SELL FROM 4/17.
Nifty-50-Stock-List: 15 BUYS, 2 NEW BUYS, 7 OVERBOUGHT; 35 SELLS, 6 NEW SELLS, 23 OVERSOLD.
CNN MONEY’S “Fear and Greed” Index: 71, RISING, GREED LEVEL.
Bellwether Stocks: 8 UP, 7 DOWN.
OF NOTE, $10K Swing Trades, SPY OPTIONS:
SPY CALLS, 288, 289 STRIKES FOR MONTHLY 4/18 EXPIRATION, 292, 291 PUTS.
OF NOTE, $10K Swing Trade Stocks:
BLACK CANDLES OF INDECISION ON CLOSE: TAN, SOXL, FNGU, TNA, TQQQ.
WHAT’S NEXT?
The market pulls back based on:
Long-term breadth (NYSI) triggered a sell signal today as the McClellan Oscillator (NYMO) continued to slide and fell through its zero line.
All of the black candles coming at the end of the recent rallies (see the charts below) coupled with the bearish engulfing candle on the SPY (although that was not with a notable increase in volume off the top). Price action during the days this week tended to gap up in the over-night futures market and then sell down steadily during the day session – and that felt like a bearish istribution under the surface.
CNN Money’s Fear and Greed Index remains at a greed level that is unsustainable.
Not much more to say except watch for follow through on the open to the downside.
(click on charts for a larger view)
#MartketTiming – Swing Signals 4/10/19
THE SIGNALS AS OF 4/9/19.
Long-Term Breadth (NYSI): BUY FROM 4/10.
Short-Term Breadth (NYMO): BUY FROM 4/10.
Price: BUY FROM 4/10.
Nifty-50-Stock-List: 21 BUYS, 5 NEW BUYS, 11 OVERBOUGHT; 29 SELLS, 3 NEW SELLS, 3 OVERSOLD.
CNN MONEY’S “Fear and Greed” Index: 70, FLAT, GREED LEVEL.
Bellwether Stocks: 14 UP, 1 DOWN.
OF NOTE, $10K Swing Trades, SPY OPTIONS:
SPY CALLS, 287, 288, 289 STRIKES FOR WEEKLY 4/12 EXPIRATION OR MONTHLY 4/18 EXPIRATION.
OF NOTE, $10K Swing Trade Stocks:
BUY ON OPEN 10/11: GS, MSFT, AMZN, FSLR, NVDA, WYNN,TWLO, TSLA. STOCK OPTIONS.
WHAT’S NEXT?
As was suggested the post below in regards to yesterday’s drop in the market and pull back in short-term breadth: “Most likely it’s a mere dip to the zero line on the NYMO.
And so it was.
With today’s pop (not so much on the Dow but worthwhile pretty much everywhere else), the NYMO and NYSI are once again positive.
Kind of get tired of saying it over and over again but as long as the NYMO and/or NYSI remain positive overall the usual play is to be long, take profits when the stocks give sell signals, and buy coming out of dips but have to say it since it happens over and over again.
Fourteen out of 15 bellwether stocks were up, 40 of the 50 stocks on my nifty-50 stock list gained, all eight of the 3xLeverage ETFs I follow — TQQQ, TNA, UPRO, SOXL, FAS, ERX, LABU, FNGU, up, up, up…
And most notably the NYMO put in another low above a low (see the chart below) so until further notice expect follow through – this is broad market run to the upside.
(click on the chart for a larger view)
#MarketTiming Signals – 4/9/19
THE SIGNALS AS OF 4/9/19.
Long-Term Breadth (NYSI): SELL FROM 4/9.
Short-Term Breadth (NYMO): SELL FROM 4/8.
Price: TQQQ SELL 4/9 UP 5.0%; UPRO SELL 4/9 UP 5.0%.3%; TNA SELL 2.7%
Nifty-50-Stock-List: 20 BUYS, 6 NEW BUY, 8 OVERBOUGHT; 30 SELLS, 6 NEW SELLS, 4 OVERSOLD.
CNN MONEY’S “Fear and Greed” Index: 71, DOWN, GREED LEVEL.
Bellwether Stocks: 4 UP, 11 DOWN.
OF NOTE, $10K Swing Trades, SPY OPTIONS:
SPY CLOSE – 287.33.
SOLD ON CLOSE – 282 APRIL IN-THE-MONEY UP 25.7%, 284 APRIL AT-THE-MONEY CALL UP 22.8%.
BUY ON OPEN – 288 APRIL IN-THE-MONEY PUT, 287 AT-THE-MONEY PUT.
OF NOTE, $10K Swing Trade Stocks:
SOLD ON CLOSE – WYNN, 17.6%; FSLR, up 6.6%; GS, UP 4.1%; NVDA UP 5.2%; AMZN UP 2.4%.
BUY ON OPEN – NFLX.
WHAT’S NEXT?
As noted in yesterday’s post, with the SPY is up eight days in a row and the NYMO turning down a profit-taking dip was coming “any day, any hour, any minute.”
Got that dip today causing profits to be taken on five bellwether stocks and SPY options (see table above). With the dip, however, the NYSI turned down – a bit of a surprise. Consequently, this pull back could get carried away to down side. Don’t really expect it after seeing so much momentum on the last bullish surge. Most likely it’s a mere dip to the zero line on the NYMO.
As said in the post below, as long as the NYMO and/or NYSI remain positive overall the usual play is to be long, take profits when the stocks give sell signals, and buy coming out of dips.
Trouble is, as of today, neither of them are positive so we’ll have to wait and see, or be ready to be nimble, playing offense with SPY puts on tomorrow’s open and playing defense immediately thereafter.
CNN MONEY’S “fear and Greed” pulled back, still at a “greed” level,” but it tends to be early at the top of swings. (Actually, the more I consider this, the more I’m beginning to think this dip COULD turn into a decent decline.) See the chart below.
AAPL finally had a reversal day and remains five days, by my measure, in overbought territory. If the market’s going to get carried away to the downside, the market-cap craziness of AAPL is a likely to be an easy down-and-dirty put play, maybe the 200 put for either Friday’s or the 4/18 expiration. The AAPL 190 April at-the-money call on this market rally is up a whopping 144% and has not, as yet, given an actual sell signal.
The banking stocks did today, a day late, what was suggested in this link – $XLF – Fighting an urge to short the bank stocks – so those short scalps are in play.
(click on the charts for a larger view)
#MarketTiming Signals
THE SIGNALS AS OF 4/8/19.
Long-Term Breadth (NYSI): BUY FROM 4/1.
Short-Term Breadth (NYMO): SELL FROM 4/8.
Price: BUY TQQQ FROM 4/1 UP 6.2%; UPRO FROM 4/1 UP 4.3%; TNA FROM 4/1 UP 5.4%
Nifty-50-Stock-List: 20 BUYS, 1 NEW BUY, 10 OVERBOUGHT; 30 SELLS, 7 NEW SELLS, 8 OVERSOLD.
CNN “Fear and Greed” Index: 74, GREED LEVEL.
Bellwether Stocks: 9 UP, 8 DOWN.
OF NOTE:
$10K Swing Trade SPY options: 282 APRIL IN-THE-MONEY CALL UP 59.2%; 284 APRIL AT-THE-MONEY CALL UP 75.2%.
See charts below.
$10K Swing Trade Stocks: WYNN is up 22.4% from 3/29; FSLR is up 8.4% from its price buy signal 3/29; AMD was a sell on today’s close up 8.2% from its price buy 4/1.
WHAT’S NEXT?
The SPY is up eight days in a row and the NYMO turned down today. Seen that many times before. There is a profit-taking dip coming…any day, any hour, any minute. But as long as the NYMO and/or NYSI remain positive overall the play is to be long, take profits when the stocks give sell signals, and buy coming out of dips.
However, for now, AAPL is up nine days in a row, which is reminiscent of previous runs in the bull market in which AAPL almost single-handed dragged the market indexes higher. It closed today at 200 and has a market-cap again approaching $1 trillion. The company has lots of cash and is no doubt buying back its stock again. That’s great for those who buy and hold but one day the buy-backs will end. A trillion dollar market-cap is not a jumping-in point to go much higher. On the last swoon, the stock dropped into the 140s, a great place to get back in after either taking profits shorting the stock above $200. For swing traders, doesn’t it seem obvious the selling or shorting opportunity knocks again?
(click on the charts for a larger view)
$XLF – Fighting an urge to short the bank stocks
The banking stocks appear on their charts ready for a quick flush down.
If anyone ever doubted the birds in a sector fly together, those charts below should relieve the doubts. Again and again, the major bank stocks’ charts look the same as history repeats and repeats, and again it looks like time to tumble.
So why do I say “fighting the urge”?
Simply put, there are extenuating circumstances. While they all stalled together Friday with XLF, the financial sector ETF, even ending the week in a dreaded doji and GS setting up a clear black-candle of indecision, long-term and short-term breadth in the general market, measured by the McClellan Oscillator and Summation Index on the NYSE advance-decline line (the NYMO and NYSI) remain positive.
Note the last time these stocks sold off in mid-March (see the charts below), the NYMO/NYSI was negative. No so this time, which probably means any drop here will be no more than a dip.
However, for nimble traders, scalpers, there could be a shorting opportunity on breaks below Friday’s lows on these stocks with Friday’s highs as an initial stop loss level. It might be easier to to buy puts for the same play. One thing about a trade like this, if it doesn’t do what the setup says, nothing is done. If it does, there could be a quick profits. And sometimes a scalp like this can get carried away into a real decline and a bigger profit.
And after essentially an eight-day rally across the board in the market (SPY is up eight days in a row), there is a chance a surprise could come to the down side.
If so the bank stocks will feel it.
(click on the chart for a larger view)
