Wednesday, 04.04.2018: I posted KMX as a short in the chat room this morning and that was a mistake. There are two charts below this paragraph. The left chart is a daily chart of KMX and the right chart is a 5-minute chart from today. KMX followed suit with the rest of the market today in seeing an initial gap down that was followed by a large wave of short covering. KMX, despite it's lackluster report, showed a gap down into a historical area of support. I should have seen this before posting the short alert. It eventually stopped out. This is why we always review our trades and try to learn important lessons. "Next time, I'll..."
Tuesday, 04.03.2018: WU was one of 4 shorts I posted as "high probability" shorts in this morning's chat room. Sometimes, the simple Pivot levels provide a ping-pong environment for price:
Monday, 04.02.2018: SPY continues to fall through support. The 76% Fib line did not hold today and it looks like we'll retest (at least) the February 9th lows:
Thursday, 03.29.2018: SQ was one of the stocks we traded today in the chat room. Often, day traders look at their 1-minute charts and fail to look at the larger picture. Why did price find support in this specific area? There's a good chance that this was an area of debate at some point in the past. SQ provides a good example of this. The support that price found yesterday and today was based on a previously tested area on the charts. It was a gap down yesterday and a gap up today, after re-testing some familiar territory. The moral of the story: expand your charts and always be aware of historical areas of support & resistance. The following chart uses a 4-hour chart:
Wednesday, 03.28.2018: I posted BZUN as a high probability short in this morning's day trading chat room. The price was 44.50 at the time and it was a winning trade. But what I want to draw your attention to is the use of Pivot lines for taking profit and the chart below is a good example of this. I've circled the S1 line. This line was both the initial line of support after it showed a gap down at the open. But it was also the line that acted as support during today's session. Knowing this, and seeing it as it happens, the trader is able to map out possible areas of support on the charts and he/she can better answer the question "When do I take profit?"
Tuesday, 03.27.2018: SPY back down to test the 76% Fib line:
03.26.2018: EUR/JPY was one of several currency pairs that showed a huge relief rally today. But there could be trouble overhead. The above chart shows a Kumo (cloud) overhead and also an area (red box) of historical price resistance. Chiku (purple line in the yellow circle) is testing the historical price curve and has not yet passed through it. The pair warrants an initial entry as a short as it moves inside the red box. Then, as that position shows profit, the trader could add to the short position as price shows more proof that the overhead resistance is still holding.
Tuesday, 06.27.2017: I mentioned DRI during premarket to both the chat room and the Facebook group. DRI was a gap up within the context of an already bullish trend. These gaps make for high probability long trades early in the morning. But you have to watch for pull-backs and profit taking as the stock climbs to new highs. The afternoon retracement is shown on the above chart.
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Wednesday, 06.21.2017: DKS was posted as a high probability short in today's chat room. This was just one of eight trades posted in the first two hours of this morning's session.
Wednesday, 06.21.2017: I posted 3 overbought oil and gas stocks yesterday afternoon. All 3 pushed over 1% lower by the next day, with a 2-minute chart of NFX showing above.
Tuesday evening, 06.20.2017: Here are 3 oil and gas stocks that I consider overbought going into tomorrow's session. Looking for these to move lower:
More information about the day trading chat room is available: click here.
Wednesday, June 14th: EPZM! Wow. Even though it is a contextual short and met resistance around the 38% Fib line (on the daily charts), it saw a massive short covering rally this morning after the company posted a successful Phase II trial. I mention this chart just to illustrate the power of short covering on stock price.
June 13, 2017: the above chart shows how AAOI opened higher this morning. It was one of four stocks I had in focus for the morning session and I posted it as a "high probability short @ 66.87". Part of trading has to do with confidence. Even though AAOI was a gap up this morning, I knew (from study) that it was a contextual short. So I posted a trade alert in the direction of its dominant trend. These "trend trades", even though they're day trades, have a high probability of success and provide the trader with confidence in their decision making.
JWN saw a lot of short covering this morning after their "going private" announcement. But I knew the context for this stock, despite the news, was very bearish. So, I posted JWN as a "high probability short @ 46.30" in this morning's chat room. The stock hit target and continued lower.
June 6, 2017: One of the things I talk about in the chat room is "contextual trading". On the above chart of GIII, we see that price is below the 3-day Kumo of overhead resistance. This creates a bearish context for this stock. Even though GIII gapped up today in price and it could have been played as a long trade, I called it a "risky" counter-trend long trade due to its bearish context. I have found that day trading in the direction of the trend context produces higher probability results.
June 5, 2017: BLUE offered two separate trade entries in this morning's chat room. Both alerts were "high probability long trade alerts" that hit their targets.
Here are the top 3 bears and bulls as of 03.29.2017:
BEARS: WFM GIS HAL. BULLS: ILG CCL NKTR
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Some previous posts are archived on this page...
January 6, 2017. Even though the overall market is bullish, the Consumer Cyclical sector has been hit hard this week. The following scan shows the "Top 11" Bears of that sector, so these are the worst of the worst. To explain this scan, it looks at 10 technical indicators across a multi-day time frame for determining trends. Here's the list:
8-01-16. TOPS wasn't even on my watch list this morning. But one of our chat members mentioned it. It was a penny stock that had a big gap up. Later, it provided multiple entry opportunities at the 23.6% Fibonacci line:
7-28-2016. Plenty of JPY reports this evening. Here's a 4-hour chart of the USD/JPY. I am expecting for this pair to meet resistance within the area of the red sell zone. But I also acknowledge the risk on the trade due to the uncertainty surrounding the reports. Here's the chart:
7-27-2016. SP-500. It's always important to know the larger context of the market. Over the past week, the SP-500 has bounced back and forth between clear areas of support and resistance, as shown on the following chart. After today's Fed announcement, price went right to the bottom of the green zone box and popped right back up again. Sooner or later, the market will break out of the rut. In the meantime, it's good to know the boundaries. Here's the 30-minute chart:
7-26-2016. EXAS. Here's another example of the types of trades we look at in the chat room. This one is called a gap. If you're not familiar with the term, then take a look at the chart posted here:
The yellow box shows how the opening price in today's session was a big jump higher from yesterday's closing price. We call this a gap up. Gaps can be caused by special news, earnings, or many other factors. And the existence of a gap does not mean that it is guaranteed to go higher. We have to study the charts, look at the momentum, and also place it within the context of the larger market.
In the chat room, I posted EXAS as a high probability long trade at $14.97 and it was our first trade of the day. You can see what happened after that entry point.
7-25-2016. UCO. Even if you don't trade ETFs directly, it's still good to look at them for examining trends in the market. I take a look at the trending ETFs each day for members of my chat room. I show them the ETFs that are trending up and down and some members use that information to help them decide on sector swing trades, etc. Here's an example of today's ETF Bear Watch List, which helped us identify momentum shorts before noon today. You can see that UCO has 28/30 red check marks, making it a high probability short trend. Stocks in the oil and gas sector today were a major reason for today's market retreat. Good stuff to know.
7-21-2016. KONE was the big winner today in the chat room. Not without risk, but an earlier "high probability long alert at 6.53" inside the chat room worked out well. Here's the chart:
7-20-2016: OPTT provided our first trade of the day in the chat room. I called it a "high probability long trade at $8.02". You can see the chart below to see what happened. If you're interested in more information about the chat room, then Click Here.
2-5-14: DDD warned about its earnings this morning and the stock fell hard. If you are new to trading, then this is called a "gap down" because it opened substantially below the previous day's closing price. When a stock gaps down like this, then I like to draw a Fibonacci Retracement that measures the gap by starting with the previous day's closing price and drawing down to the low-of-the day. Then I watch the 23.6% Fibonacci line so see how price will respond to this line. This line is circled in blue on the chart below. I've also circled the point where price rises up above the VWAP line. Either entry would have worked as price rose above those possible lines of resistance and created substantial day trading gains today.
1-28-14: This past weekend, I posted a YouTube video in which I analyzed the S&P-500 and looked at possible areas of Support for the current market. As you may have noticed, we went right to the 38% Fibonacci line (blue circle and arrow on the chart below) I mentioned in that video and that is where the market bounced...so far. We are keeping our head above the Kumo, so that area continues to act as support. But Chiku (see red circle below)is threading its way through the historical price curve. This last indicator makes this recovery tentative so far. While the overall trend of the market remains bullish, it is still somewhat fragile at this point.
1-23-14: I wanted to follow up on yesterday's blog entry regarding EUR/AUD. I really thought it was going to go lower after yesterday's resistance. But, you have to stay open to what the charts are telling you, and this one is a good example. In yesterday's entry (shown below), I mentioned that a price move above the 38% Fibonacci Retracement and above the Kumo would signal a bullish move. And that's exactly what happened after China reported their manufacturing at the lowest level in the past six months. EUR/AUD soared above the Kumo and then continued higher after positive manufacturing data in Europe and sluggish manufacturing data in the U.S.
In the chart below, I show today's price movement and also show the 127% Fibonacci Extension line (which was also the same area as the Pivot Line R3). I took my profit on the trade and I show the screen shot of my ROI % below the chart. One of my reasons for showing this is to show the power and the profitability of trading the Forex Market. (Note: while I no longer offer access to my Forex training materials, I perform live market analysis each morning for the U.S. Stock Market. If you're interested in more information: Click This Link.
1-22-14: Here's what I see happening on the EUR/AUD chart. Earlier today, we tested the Pivot Line on the 30-minute chart as well as the 38% Fibonacci Retracement. Also important is the 30-minute Kumo that is part of the Ichimoku system. This Kumo (cloud) acts as resistance to price and we can see how it has been stair stepping down since the January 16th peak. This is just one example of using Fibonacci plus one element of Ichimoku to determine support and resistance. A move back above the 30-minute Kumo and above the 38% Fib line would make this pair more bullish. Tomorrow's economic reports out of Europe and the U.S. will impact this pair of course.
1-15-14: TSLA was a stock that a lot of people were watching today. I've added three criteria to this chart to help you understand the price action. First, we had price falling below the VWAP (orange line) and the 23.6% Fibonacci Retracement...nearly at the same time. That was the first signal that the early morning pop was over. Price debated the VWAP line several other times and provided additional shorting opportunities. The 76.4% Fib line became a line of support so that it still finished positive for the day but far off its early morning highs.
1-10-14: I traded YRCW twice over the past two days. The chart below shows today's analysis. You can see another example of price riding above the top line of the Keltner Channel, just like the one I mentioned yesterday on SGMO. But I've also added another element: Fibonacci Retracement. I pulled from the previous day's closing price to today's low of the day. That gave me a 23.6% Fibonacci Retracement at 12.75. My entry in the chat room was 12.74. Price had already been riding the top line of the Keltner Channel when I entered the trade long. But I waited for the confirmation of the Fibonacci line before entering the trade. It moved up about 5% from that point, not quite as large as yesterday's gain of nearly 10%. But still a nice trade.
1-9-14: SGMO provides a useful indicator lesson. We traded it long in today's MorningHoursTrading chat room. But many members probably failed to grasp the full benefit of this trade as it provided two nice entries today. There are two key indicators to watch on the chart below: VWAP and the Keltner Channel. When you start day trading, it's easy to take the quick gains that a trade will give you and then stop looking at the chart. But a small number of trades will go on to made big moves. So what can you look at to keep you in the trade?
On the chart below, price found support on the VWAP and then moved to the top side of the Keltner Channel. You can think of this top line as a wave. It doesn't happen often, but you can see two distinct price runs on this chart where price rides that upper wave of the Keltner Channel. That top line acts as a line of support. As long as price is rising and staying on the top side of the top line of the Keltner Channel, then you can stay in the trade and ride it out for larger profits.
12-27-13: Today's chart highlights a key indicator that I watch when I'm day trading stocks: VAP, or Volume at Price. These are the horizontal red and green bars I've circled on the chart below. Essentially, it reveals investor sentiment about a particular stock at various price points on the chart. So, bullish horizontal bars are shown by longer green bars.
When you add VAP to the other two indicators shows here (VWAP = Volume Weighted Average Price; Pivot Points), then you get a clearer picture of where price might find support. The bullish VAP bars give us more confidence to enter the trade in the direction of the bullish sentiment.
I'll let you pull up the chart on your own computer and see what price did after this point.
12-17-13: HLF (Herbalife) has been in the news due to investor sparring over the value of this stock. Day trading HLF was tricky today, but there is a pattern here worth mentioning. It is one of the strategies mentioned in my book on Trading the Afternoon Market, and it's called "the ping".
HLF had a period of nearly two hours this morning when price debated the previous day's closing price (the horizontal yellow line on this chart). But, as you can see, every time price dipped to the line it also shot back up. It wasn't a big gain each time. But you can see how price dipped and we get a little shadow on the candles as price bounces off that line. This happened eight times. After two or three times, you might begin to get the idea that price is going to find support there. But rather than getting married to the stock, you can just play the ping. Buy it long each time it goes to the line and then sell for a small profit. Rinse and repeat. Yes, this is more like "scalping", but if that's the pattern and that's where the money is on this chart, then you go with the money.
You'll see the ping pattern in more horizontal markets. But it's a nice pattern to stick in your mind for the next time it occurs. Your stop in a situation like this would be just below those recent lows, so this would be a low risk trade.
12-16-13: I've posted two different charts for today's analysis. The first one is a 5-minute chart of AER (gapped up today) and the second one is a 1-minute chart of the same stock. Take a look at each one and see what you see. In the 5-minute chart, we see a table-top stock...price looks very flat and offers little opportunity for day trading. In the 1-minute chart, I've added VWAP and an 8 SMA and I've narrowed up the view.
The point I'm trying to make is that our perception of opportunity in the market (and in an individual stock) is often determined by our time perspective and our use of indicators. As traders, we need to be flexible. There isn't just one perfect time frame for day trading. But, by changing our time frames we will sometimes see things we had not seen before. In the same way, indicators take on totally different meanings depending on the time frame we've chosen for viewing them.
So, the point is to stay flexible. Test various time frames and see what works best for you. If you like the 5-minute time frame then that's fine...you would simply not trade a stock such as AER and you would go and look for something else. But when the whole market is flat, those larger time frames may produce fewer opportunities for day trading stocks.
12-13-13: TROX was a gap up stock today. In the chart below, you can see how price tested the R3 line (one of the Pivot Lines) and found support on that line. Now, when I traded it today, I thought price was going to fall through that line. And price did...briefly. But then our Stochastic indicator flipped back up as price found support on that line. A nearly identical scenario repeated itself in the afternoon session.
So why is this important? We use lines of support and resistance, such as R3 lines, as the basis for our trade. If we are shorting the stock at that line, then it is because we believe price will fall through it. But what if we're wrong?! Do we hold onto the trade out of stubbornness, hoping it will come back down? Do we wait until it hits some magical stop limit of 1% or 2% before we exit the trade? No, if the trade moves against us, then we humbly acknowledge that we were wrong and we exit the trade as soon as we recognize that we were wrong. Why would we want to wait any longer?
Trading in this way, our stops on trades can be much smaller. When we're wrong (and we will be), then we get out of the losing trade quickly. And, if we're open to what the charts are telling us, then we might even exit the first trade and take it in the correct direction. In this way, the new trade will often more than cover the cost of the losing trade...if we stay open to what the charts are telling us.
12-11-13. The chart below of the S&P-500 shows critical lines that I am watching as we try to determine "which way is the market headed?" There are several drawings on this chart, so let me explain them. The diagonal red line is both a trend line (that starts with the November lows of last year) while also being a Fibonacci Retracement of that rally. Based on that drawing, we do not get down to a 23.6% Fib line until around 1700. The vertical orange line is a Fibonacci Retracement that begins with the last time we found support and bounced off of that red trend line. Based on this orange Fib series, price has come down to test the 23.6% Fib line several times in the past week and our critical 38% Fib line is around 1750. You'll notice that 1750 is also in the same area as our red trend line. At this point, I would not be surprised to see price drop down and test the 1750 on the S&P-500. Beyond, that, it is anyone's guess. So why is this important? Whether we are day trading stocks or swing trading or trading options, it is good to look at market context. Your trades will always be more successful if you trade within the larger directional trend of the market you are trading. Whether you choose the shorter term down trend or the longer term long trend depends upon your time perspective on the market. For example, I would be reluctant to buy Call Options that expire in December based on the current short term market context.
12-9-13: When Sysco and U.S Foods announced their merger, SYS saw heavy volume during pre-market. But, as the chart below shows, price faded from the open as investors took profits. If you draw a Fibonacci Retracement from the previous day's close to this morning's high, then you have a 23.6% Fib line you can watch. While you might think price would find support on that line, having that line lets you know very quickly if the trade is going in your favor or not. When you find out that you've got the direction wrong, then it's best to be humble, admit your error, and then do a "stop and reverse". That's when you stop out of the first trade before you lose any more money and then you go short. Your initial target in this situation is to recoup the money you lost on the first trade. But this chart shows you could have held the short for much more profit.
11-27-13: Today's trade of BIOS followed a similar pattern as the one I mentioned yesterday with AAPL. For BIOS, price gapped up above the R3 Pivot and then stayed in that "sweet spot" which is just above the top of the Keltner Channel and just below the top line of the Bollinger Bands. This chart is on a 1-minute chart, which is what I use during the first 30-45 minutes of the market open. The double-arrowed line shows a good exit as price breaks below the previous candle's base.
11-26-13: Today's annotated chart takes a look at AAPL. I mentioned this one in the chat room and price just continued higher. There are many ways to look at the reason for this stock's push higher today, but one of them is by using a combination of Bollinger Bands and Keltner Channels set at their default settings. Stocks that start to run up often find themselves in something I call "the sweet spot". It's a place just above the top line of the Keltner Channel (the darker channel on the chart below) and the top line of the Bollinger Bands. As you can in this chart, price just stays within that channel until around 2:00 today. A nice move higher...and using this combination of indicators helps you stay in the trade to capture more of the profit whether you're trading the stock or the option.
11-21-13: Since I trade both stocks and Forex, I'll occasionally include a chart of a Forex trade set-up. On the chart below, you can see how the 38.2% Fibonacci line became a line of support for GBP/CHF today. While I find the 23.6% Fib line more important for day trading stocks, the 38.2% Fib is often a key line for trading the Forex Market.
Not shown on this chart...you can also add Ichimoku to see how the 30-minute Kumo supported this long position.
11-20-13: VJET was one of the trades in the chat room today. I mentioned a short entry at $52.80 and you can see where price went after that point on the chart below. VAP was used to show the dominant bearish sentiment on this stock (price has been falling since Monday) and Pivot Points were used to show how price stair-stepped its way down to larger profits. You could also add a Bollinger Band to this chart and you'd see how price stayed in the lower part of that channel the entire day, keeping you in the trade for bigger profits.
11-18-13: I've been talking about VWAP (Volume Weighted Average Price) recently in these Annotated Charts. The chart below of ARUN offers another good example of trading with this indicator.
ARUN was a gap down stock this morning and the VWAP line (purple line) became a steady source of resistance. In today's blog, I talk about this chart in regards to "the basis for the trade".
11-15-13: We went long CADX at 7.73 this morning in the chat room. The image below isn't very clear, but it went up 20% from that point. The question is, "How do you stay in a trade and ride it out to larger profits?" Well, there's not one way to do it. But two indicators are shown below to give some assistance. The left panel shows a 20 EMA on a 1-minute chart. You can see how price stays above that line...until it doesn't. So that crossover would be one exit idea. The 20-EMA is part of several other indicators such as Bollinger Bands and Keltner Channels, so it's a good one to always have on your charts.
The right panel shows PVT (Price Volume Trend) on a 1-minute chart. I place moving averages of PVT on my chart and this also helps to see when crossovers and possible exits occur.
11-14-13: In this intra-day chart of ONVO, you can see how VWAP (Volume Weighted Average Price) provided support for today's $11.03 entry in the MHT chat room.
11-13-13: I mentioned GOGO in today's blog entry.
In the chart below, I show the daily chart context for GOGO. The horizontal green line shows the approximate area where Chiku Span (purple line) crosses above the historical price curve. You can look to the right and see the box outlined in purple. That area shows a combination of several Ichimoku factors. This is where current price reflects the Chiku crossing. But it also shows a Tenkan-Sen crossing of the Kijun-Sen that occurred above the Kumo (cloud).
Price has enjoyed a nice rally since that point.
11-12-13: The following chart shows a 30-minute chart of USD/CHF. Chiku (spelling varies) is a "lagging indicator" that is part of the Ichimoku system of trading. When it crosses through the historical price curve, then it often signals a change in sentiment since it also signals the end of a previous price wave.
This chart shows two instances of this. Chiku (the purple zig-zag line on the chart) falls through the historical price curve at both the green and red horizontal lines on the chart. The current price for when that occurred is circled. You can see the price break downs that occurred following that Chiku crossing.
11-7-13: In the chart below, I've used the larger Fibonacci lines (in red)as both a retracement tool and as a trend tool. Despite today's pull back, we are far above that trend line. Then I've drawn a Fib series from the most recent pull back to the most recent highs (in blue). This shows price pulling back to the 23.6% Fib line with today's retreat.
11-6-13: Solar stocks pushed lower today as a group. But they maintain their bullish bias. This chart shows how an unusual view can sometimes highlight buying opportunities. It shows a 4-hour view which is often used for Forex trading but it is not often shown for stocks. In this example, the CCI indicator makes a couple of dramatic moves down to the -200 line and provides excellent buy signals. (Today's dip was not that low.)
11-5-13: OXBT showed initial support at the 23% Fib line after the first pop up. The 38% Fib provided support on the second leg.
11-01-13: We've been trading NQ a lot in the chat room lately due to its high volatility. Here's a chart showing Pivot Points and Fibonacci. We shorted at the Pivot Line today for a nice gain. You can read more in today's blog entry.
10-31-13: We had big short move on the EUR/USD today. See chart below:
10-30-13: The following chart of QCOR shows VWAP (Volume Weighted Average Price) as a line of resistance.
The following video is a review of the JKS support mentioned in yesterday's blog.
JKS is one of many solar stocks that took a beating today. On this 2-hour chart, we see possible support at S3 and historical support from 10-9-13.
The above chart is from 10-25-13.
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