Author: Evan

What I am doing with the apple I bought

Continuation of ,  Why I am buying apple on Monday

So far we have a successful price reversal at our anticipated inflection point and things are looking good (knock on wood).

As I mentioned in the previous post I bought 1/3ish size on friday aftermarket at 525.24 and I added up to a full position this morning picking up more in the 517s. My average cost now comes in about 520.50.

Because I am a daytrader at heart I do have a full ‘intraday’ size and I am looking to trade around a core swing position. For those who are simply looking to swing you can use todays low as your stop and continue to trail your stop if price continues higher.

For those interested in my intraday targets I am currently looking to peel this extra size off at about the 526.5  level and continue to trade around position and below 520 I would take off half my position. Note this is a bit more difficult when I do believe the market will continue to work against us for the next few days. All the while I do have a small SPXU position I picked up late on Friday.

Why I am buying apple on Monday

Here’s why I am looking to buy AAPL on Monday.

  1. Inverted head and shoulders setup seen above on a 240 minute chart.
  2. 518 – 525 is the buy zone I am anticipating a long entry.
  3. 61.8% retracement from the 504.75 low to 555 ripper we saw this week comes in about 524.
  4. Previous swing point from early December (created left shoulder) about 518.
  5. Also  518 coincides with the previous break out area that ignited the move this past Monday
  6. Finally take a look at this chart posted by @hftalert  whose work I do subscribe too, http://www.hftalert.com/aapl_lows.htm

I actually purchased 1/3 position Friday after hours as apple continued to slide down at 525.21. I will look to make that a full position on Monday and I will be using roughly 515 as a stop.  Trading below 515 would indicate to me the lows want to get tested again.  Again this is just a trade, not a stance that I am married too, simply risk/reward and probabilities aligning here for my personal risk tolerance and trade style.

Your first trade is everything

Trading is all about performance. Many people can talk the talk, be very skilled technicians, know everything about the economy, the market, politics, charts, you name it, and still not be able to pull money out of the market. While academic knowledge is important and sets the foundation, it takes much more work to be a long-term consistently profitable trader.

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Bullish December outlook. less then 20 days remain.

overall market outlook, gap analysis, trade expectations

This market looks strong. Since the 11/16 low we put in 2 weeks ago we have done nothing but push higher and then flag out with the exception of maybe 11/28 which saw a spark of more intense selling but even that was met with a full recovery by the bulls into the close. We are seeing similar action in individual stocks, and some that have been barely even seen had sideways consolidation along the way.

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Balanced market day 4

overall market outlook, gap analysis, trade expectations

Do not overthink this market. Traders can extract all types of analysis and thoughts from the recent action and quite honestly it is really simple. We are in a range bound, balanced market where both buyers and sellers are finding value in initiating trades. Fading the extremes has been working. I am not claiming it has been easy, as it it is always more difficult to act in the moment then analyze after the fact. Until we see a definitive breakout or breakdown similar to what we saw on November 7th then I will be focusing on this approach in all stocks (as most are in this balanced state) specifically on my entry position,  and not chasing the excitement.

30-Minute key SPY levels
  • $SPY support at 137 – 138. recent support zone where we have seen buyers step in.
  • $SPY resistance at 139 – 139.5. recent resistance zone where sellers attack..

Early signs of buyers

overall market outlook, gap analysis, trade expectations

Friday we saw the market stop the recent downward selling pressure ever since the elections and close in the green. It would have been even better had the markets closed at 1pm since we were nearly 15 handles higher in the SPX cash market but nonetheless the buyers efforts were there. Overall I believe we will see some two-way trading today in a balanced type environment with a bias to the upside. I will be looking for some range bound setups if we can carve out clear ranges on some of these stocks and indices looking to fade directional moves (unless we get a clear change of character break above yesterday high/low of day etc).

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Live to fight another day

overall market outlook, gap analysis, trade expectations

The sellers were out in full force yesterday dropping their stock right down the elevator shaft, nearly 3%, in the major indices at the lows. Admittedly I tried to exercise some knife catching around 140.4 in the SPY as per my tweet yesterday late morning and I was naturally bulldozed over. But in this business, even the most aggressive (low probability) ideas are allowed so long as you manage the risk accordingly. I lost 30% more than my average losing day yesterday but thanks to [relatively]proper money management that is nothing of significance to the overall account. I cannot stress enough the importance of having a concrete plan when it comes to RISK. I am a discretionary trader in my approach to the markets, I do not have a red light, green light system, I do however have a RIGID approach when it comes to managing risk. You will not survive in this business without one.

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Trading the election results

overall market outlook, gap analysis, trade expectations

Futures are all over the place, ping-ponging back and fourth between cash SPX 1410-1425 ($SPY 141.6 and 143). As a day trader I am looking for opportunity, in any direction. My instinct is to be more long with a 1410 open and short bias if we opened towards the top of the range towards 1425. The reason is simply because we are in this wide trading range (with some air pockets in between). I doubt I will be trading the SPY itself, but its necessary to know where price is trading with respect to value while taking trades in other equities. In other words, if I see a great short opportunity in another stock and the market is not settled down into support at 1410 I will much more willingly take that short with more conviction/size knowing the market has more room to easily fall to the downside.

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