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The Complete Trade Risk Blog Roll

Publishing market analysis and trade ideas since 2012.

wait, who brought the bully

Bully? bulls. Bullying the bears, get it? Hah. haha. hahah...This was a light trading week for me as I took some vacation time and missed half of wednesday and all of thursday and friday but lets see if I can catch myself up here in the process of reviewing my usual charts.

$SPY now just a stone throw away from all time highs thanks to the Q&A session wednesday evening with chairman bernanke making comments about the feds easing timeline. This seems to be the same story playing out over and over again this year: relatively overbought on many metrics but still that doesn't mean we can't continue higher. In fact its more likely we DO continue higher in this channel or after a healthy pullback or sideways consolidation through time. On a larger 'swing' timeframe this action is very bullish as we bee-lined to the previous highs especially the path it took to do so. However with that said, I would expect some resistance around previous all time highs, 168.18ish even if it is just temporary. Be aware of the barrage of earnings coming this week as that could definitely create some volatility in some  names/sectors.

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the triforce of trading success [part i]

In the Legend of Zelda, the ultimate source of power is held within the triforce. The triforce consists of three forces: power, wisdom, and courage. After the gods created the realm, which came to be known as Hyrule, they leave the triforce behind to keep balance and protect the land. Destined to conquer Hyrule, Ganon attacks Hyrule, steals the triforce of power and escapes. The only person who can save the realm is Link who sets out on a quest to defend Hyrule and take back the triforce of power.

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bulls aint afraid of summer heat

$SPY well I titled last weeks post as "the easy bounce is over" but we saw some clear continuation on this shortened holiday week. We came into the week probing the downside a bit but a two day dip is about all we could get before the bulls stepped up preventing any type of rollover. I know many bears will speak to the light volume but guess what, price could have just as easily traded lower on light volume but it didn't. 162.30 give or take is the breakout level to watch and the longer we can hang around there or stay above it the more bullish we should be in the short term. The market is showing a lot of resiliency after pushing off the lows we put in two weeks ago around 155 and the fact that we continue to chug higher/base instead of putting in any real retest speaks to the bull case. Doesn't mean we can't see a hard sell week coming up, but given the action we saw the past two weeks it's tough to jump back into the bear suit until the market shows you a reason to. (more…)

the easy money bounce is over

$SPY coming into the week  well oversold by almost all standards we got exactly what one should expect to happen, an entire week of bullish bounce-like action working off those oversold conditions. In the past two weeks now we have seen a large impulse move to the downside followed by about a 50% retracement as of the close friday. So for that "intermediate" timeframe the bears are still in control. The bulls have just made the "easy" money this week but now the gains will be harder fought to advance above fridays highs of 162 and into the open gap. In the coming week(s) it will be important to measure how much of this rally the bulls can hold onto. The longer price can hang out in the upper 50% of this past weeks leg higher the more likely it will  make a successful assault on the open gap. Bottom line. I would like to see some digestion and sideways action before attempting to push higher and I think 158 on the downside sets up as important support for the bulls to hang onto.

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2013 summer solstice meltdown

$SPY hindsight analysis makes this trading business look so easy. A waterfall lower caused by the fed, raising rates, the USD, call it what you want, it doesn't matter. The facts are this. This week created a lot of technical damage as the S&P was down nearly 5% in 2ish days (dont forget .83 cents ex-dividend so the downside LOOKS worse then reality). The elastic has been stretched and we're "likely" to breath/retrace/sideways here a bit. I believe for at least the start of this week we should see the market catch its breath and digest the shockwave that just hit it. IF we do see some upside early next week i wouldn't get too excited, look at the last few candles here, V shape bottoms are rare, you want to see healthy bases develop before taking longs and we're days if not weeks away from a developed base at these levels. call it 157 half to 161 half is the range I am looking at this coming week.

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wedging our way into summer

$SPY the markets continued this week carving out a range in between last weeks candle and ended with an inside week. You can see here on the 30 min chart we are making lower highs and higher lows which makes sense within the larger context of the inside weekly candle. A lot of people have opinions as to whether we are going to shoot back up and return to highs or roll over and begin erasing our january to april rally. I think its too early to predict the next directional move right now and I suspect we are going to spend considerably more time within this 160 to 165 range on the SPY then most think. I think we can have some fakeout breakout moves in both directions but for now I think we need to do some more filling in before a sustainable move. A daily close below 160 or above 165 would begin shifting my opinion bear to bull respectively.

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six ways to more profit as a trader

stop adding to losing positions

It is just bad practice and here’s why. Losing trades are losers for a reason. You either timed your trade incorrectly, your levels were not as solid as you thought, or you are just simply on the wrong side of the probability curve this time around. Honor your stops and move on. The only reason you are adding to a loser is because you cannot accept the fact that you are wrong in your trade idea. You’re hoping it can retrace back to some arbitrary break even level which means nothing to the markets.  (more…)

everyone loves a nice V bottom

$SPY everyone loves a nice V shaped bottom. The market staged an impressive  2 day bounce off the lows ending the week with a perfect hammer on High volume (weekly chart). If you were on the sidelines for this move and didn't catch any of it you need to be real careful jumping in here at almost 165, 5 pts off the lows. I believe if we gap up on Monday it would be a better sell rather then buy or add to positions. I am very constructive on this bounce but I think some rest/retest of Fridays gap would be very constructive. I don't think the market will make things too predictable especially in its summer trading so I think even a quick flush down towards those lows only to rip back higher might be in the cards. I am in the camp that these lows give or take a SPY point or two will hold in there. but we shall see. Levels on chart, I think continued two way action is in the cards but bulls are fighting for the ball.

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long setups in a not so long environment

$SPY Tuesday Dump. Wednesday flat. Thursday up. Friday Dump. Fridays dump essentially completed a measured leg down and also broke below the key 163.95 double bottom low we put in the week before. While this is currently a clear break below that level I am very interested to see Monday mornings action. Do we gap down only to have bulls buy aggressively and recover this level?  Do we gap down and see follow through lower? Do we open higher and trap alot of sucked in shorts from friday? Perhaps some sideways around this lower range before really resolving. For me, as I gauge commitment on Monday I will  keep things simple. Below 164 = sellers in control. Above 164 and the bulls still got it. I do like the overnight two way gaps we are starting to see now, some additional opportunity for us daytraders.

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finally some real two way action

It was great to see some two way action this week after the Bernanke speak on Wednesday putting in at least a short term top in the indices. At this point the uptrend remains fully in tact and I don't think theres any question there but this week at a minimum did give us our first warning sign, albeit a small one. It was a good week for my trading account as I was able to get some nice short positions in on wednesday which basically made my week. I look forward to the potential vol entering the markets. Now onto the charts.

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