$SPY #Options – day trading calls 10/11

These trades are based on this strategy:

#Options – Buying Calls and Puts

And this context:

#MarketTiming – the NYMO low above a low

INITIAL ENTRY:

FIRST HALF PLUS 50%:

SECOND HALF CLOSE OF THE TRADE PLUS 46%:

All Twitter timestamps are Pacific time:

$SPY #Options – Day trading calls – 10/10

INITIAL ENTRY:

FIRST HALF OFF:

CLOSE OF DAY TRADE

$SPY #options – Day trading calls in the 10/04 market bounce

This trade was based on this post:

#Options – Buying calls and puts

And this context:

$SPY #Options – Day trading calls for 10/3 bounce…

All Twitter timestamps are Pacific Time.

FIRST TRADE:

SECOND TRADE:

CLOSE OF DAY:

#MarketTiming – okay, we are close to a bounce…

Okay, we are close to a bounce.

Pretty much everything is oversold.

All of 3x-leveraged ETFs I follow are on sells and oversold – eight out of eight – TQQQ, TNA, FAS, LABU, ERX, SOXL, FNGU, UPRO.

That does not happen often. Last time they were all together all at once (in August), TQQQ went from 55 to 64 in the next four days and to 69 in six.

But SPY is the indicator to consider this time (see the chart below).

SPY is at a level it rarely sees, five times actually since May, and each time signaled at least a bounce if not tomorrow (Thursday), soon…

Given that SPY is a broad measure of the general market and a big-money index, when it bounces it will take most of the market with it so it might be prudent for swing-trading shorts to tighten stops or take some profits here.

Regardless, a bounce now will still be a bounce to sell again.

(click on the chart for a larger view)

$SPY – Bounce back to last week again

MARKET TIMING SIGNALS FOR 9/4/2019.

Long-Term Breadth (the NYSI): Buy DAY 5
Short-Term Breadth (the NYMO): Buy DAY 1
Price (the Nasdaq COMP): Buy DAY 1
Volatility (the VIX): Buy Day 1
Nifty-50-Stock-List: 23 BUYS, 12 NEW BUYS, 11 OVERBOUGHT; 27 SELLS, 2 NEW SELLS, 6 OVERSOLD.
CNN MONEY’S “Fear and Greed” Index: 30, Rising, FEAR LEVEL.
Bellwether Stocks: 14 UP, 1 DOWN.

WHAT?

The market had a strong advance today taking it once again to the top of its free-swinging month-long consolidation.

It seems like I have written this post three time now. Seems like? I indeed have.

See $SPY up against a high wall and ready to rise and $SPY – From Friday to Friday to “deja vu all over again” below.

In other words, we’ve hads a whole lotta bouncing around going nowhere.

WHAT NEXT?

Short-term breadth (the NYMO) has been making choppy lows above lows since it bottomed August 2nd (see the black line in the middle section of the chart below) and the all-important NYSI has been rising now for five days.

Taken together those indicators make it appear SPY is about to break above its overhead resistance at 293/294 and move to the recent high around 300 on this up swing, but the ETF has appeared perched to do that twice before this month and still hasn’t done it.

I would think another turn down would be most discouraging for the short-term bulls and might bring a harder sell off.

But I don’t think that’s going to happen (I know…just as soon as it’s said it won’t, it will).

The Fear and Greed Index is gradually making it’s way higher. My nifty-50 stock list had 39 stocks on buy last time SPY took a look at this high wall of resitance, but now the list has only 23 stocks on buys, giving room to move to the upside. VIX turned down today to add another short-term indication there can be follow through to the upside.

Unless President Twitterdumb intervenes again, I think this time SPY goes higher probably for the rest of the week and taking the general market with it. But I will day trade Friday’s SPY puts if it doesn’t.

(click on the chart for a larger view)

$SPY – dead cat or not, the open always matters…

MARKET TIMING SIGNALS FOR 7/18/2019.

Long-Term Breadth (the NYSI): Sell DAY 2
Short-Term Breadth (the NYMO): Buy DAY 1
Price: Buy DAY 1
Nifty-50-Stock-List: 17 BUYS, 9 NEW BUYS, 8 OVERBOUGHT; 32 SELLS, 2 NEW SELLS, 8 OVERSOLD.
CNN MONEY’S “Fear and Greed” Index: 47, rising, NEUTRAL LEVEL.
Bellwether Stocks: 7 UP, 8 DOWN.

WHAT?

In yesterday’s post it was noted that:

“The market will go down until it doesn’t, and granted, that could be even as early as tomorrow. The VIX remains below 15, which is a bullish level indicating this is likely a pullback and not a serious correction.”

The is pretty much what happened with a gap down before recovering.

While all three of my end-of-the-day signals were on or went to sells on today’s open in options trading and day trading the open always matters.

See the charts below. Color-coding on the these TradeStation charts has been getting simpler and simpler.

Those trades were triggered by the open for each option. They are set for $10K in each trade (what I call the “10KDayTrade” on Twitter) only to make calculating the percentage gains and losses easier. So $10K in 296 call for Friday’s expiration made about $5,900 into the close on the black chart on the left and the brief trade in Friday’s 298 put on the blue chart to the right lost about $900 so the net today across both trades was about 50%.

WHAT NEXT?

Today’s recovery was enough to turn up the NYMO which is a cautious buy signal. I say “cautious” because long-term breadth is declining. Consequently, today’s turn could be a dead-cat bounce with the downward slide resuming in short order. It’s a trade worth taking with a tight, impatient stop — in other words for me it better go my way right away or I’m going away.

At same time, tomorrow’s open, like today’s, is going to matter in both options and day trading. As far as I’m concerned SPY options are always a day trade. Stocks are a different game. Based on today’s close, stocks on my bellwether list to watch for longs tomorrow are AAPL, FSLR, SHOP, TWLO, and NVDA while BABA, WYNN and QCOM may be shorts.

The open for each will tell the story.

(click on the charts below for a larger view)

#MarketTiming – Stall or drop?

Been on vacation so haven’t been able to keep this blog as timely as I would like.

And besides, being in places where there was not even cell-phone coverage, I see I’ve missed a pretty sprightly rally. That’s the way it goes sometimes.

Anyway, TQQQ, my favorite leveraged ETF, is up 21% on the short-term breadth signal (the NYMO), six trading days ago. That signal triggering from double-bottom territory on the NYMO set the stage for the rest of the signals. Consequently, TQQQ is up 12% on its price signal and 8.3% on the long-term breath signal (the NYSI).

See the charts below — from left to right, short-term breadth, price, long-term breadth.

Since the rally’s start on the open of 6/4, other leveraged ETFs of note were SOXL (semiconductors) up 23.7%, FAS (financials) up 11.6% and FNGU (fang stocks) up 25.8%.

Gains among my be “bellwether stocks” were led by TSLA up 20%, coming from deeply oversold, AAPL up 11%, WYNN up 12.4%, SHOP (newly added to my list) up 14.4%, AMD up 14.5% and even a biggie like MSFT was up 9%.

Did I mention that we’re talking just six trading days, from Tuesday last week to Tuesday today? I guess I did. Six days, needless to say, that is what swing trading is all about.

So what now?

Both short-term breadth and price gave sell signals today with much of the market still wildly overbought. Likely we get a pullback starting tomorrow. Or at least a sideways stall to work off the overbought conditions. Note the big black candle of indecision today on the chart to the right. Below the low of that candle it’s a drop, above the high a resumption of the bounce.

If, by chance, this upswing was just more of the thrust from December to make everyone believe the bearish growl last fall was nothing to listen too, I suppose this rally could drop right out of the sky.

Either way, as long as the long-term breadth (the NYSI) is rising, the path of least resistance is up.

(click on the charts for a larger view)

$SPY – Friday’s calls at the end of the bounce…

Friday’s 285 calls immediately vaulted as high as a 42% gain but wound down for the rest of day, hitting a breakeven stop along the way, and finishing down 52%.

If one studies the day’s bounce from the opening gap down and final reversal at the close (see final chart below), it’s apparent there was not much to do to capture some of the profit on the day before it was all gone on the stop loss. The bearish gap at the open might have given a hint to fast and nimble traders three days was all this bounce would have. Of note, it’s evident how important a stop is to avoid letting a profit turn into an outright loss.

Suspect Friday’s price action is a sign this little three day bounce has reversed and there will be downside next week, but we’ll have to see Monday.

There were no puts to buy on the reversal day since after the early run up SPY never quite fell back through its open.

(click on the chart for the full twitter thread)

(Click on the chart for a larger view)

$SPY – Long Friday calls on bounce day three…

The bounce continued Thursday…

(Click on the chart for a view of the final tweet)

(Click on the chart for a view of the initial tweet)

$SPY – Calls on bounce day two

The market followed through strongly Wednesday after a “turnaround Tuesday” on the current bounce signal.

(Click on the chart for the full Twitter thread)