Here's Thursday's Newsletter

Posted by matt on 23rd of Jan 2020 at 07:41 pm

also be careful of the BPSPX thinking it's the grail - it will give you big whipsaw losses at times - use higher lows for stops vs waiting for it to trigger. Also that's not a full fledged system, like any indicator it tends to go back and forth. For example rarely does it give two big winning trades in a row, most of the time the next signal or couple signals are whipsaws. Which brings up my point, when it does go on a sell signal next time, the odds are very strong that will be a losing signal. It's kind of like wave patterns - markets move in waves, wave 1 up, wave 2 is your corrective wave, wave 3 is your trending wave, wave 4 is corrective.  Wave A is trending, wave B is corrective, wave C is trending - note that trending waves are following by consolidation waves, that's why trend indicators like BPSPX tend go back and forth because the winning trades to be only be on waves 1, 3, 5, A, B, and losing trades occur on waves 2, 5, B

also I sense emotion in your post, try to stay objective because emotion clouds judgement - there is a time to trend trade and  time to take profits - we are clearly in a trend. Be careful looking at the trend from Oct until now and basing your whole future trading conditions on that.  It's like the guys I've seen here post before how the 13/34 EMA cross works so well on a 60 min chart because they looked at the last 3 months and tell me they are only going to follow that - however if you actually bactest that, it's a losing strategy . Be careful looking at a short segment in time and extrapolating that to a grand trading plan

you are looking at it the wrong way. mom/pop generally do not make good decisions on the market historically.  Also they rarely want to make changes and simply buy and hold, for them to start placing $1 stops on long term positions like MSFT and AAPL is way out of norm.  I mean hey if they are the expert now, I'll gladly step down and let them do the newsletter for you

look doing fall into the trap of thinking mom/pop or buy and hold investors are now geniuses.  What the hyperbolic market has done over the last few years is make anyone who buys and holds feel like they have it figured out  etc, while ironically many traders who know 1000 times more did not do as well because they over thought things, sold when prices were overbought only for prices to get overbought. 

everything goes in cycles, the last few years your neighbors who have 401Ks and make no changes are the winners, while one day in the future be on the wrong side again when the market enters a bear phases and more of a chop phase. 

however the whole point to my post below as the the buy and holders are starting to 'short term' react to things, and place tight stops, vs just buy and hold like they used to. That's out of norm.  

again we can all learn form each other. I've told Steve many times - short term trading is fine but there's also a place for recognizing when to hold.  I think our trade sets here are outstanding, I've giving you my long term favorite ideas, and our daily and 120 min higher low systems allow you to ride these uptrends for as long as they will go on, while at the same time being protected

enough rant, time to record the newsletter

Update: Update: some ideas to monitor

some ideas to monitor

Posted by matt on 23rd of Jan 2020 at 06:08 pm

CIEN - Chart Link - for some reason CIEN didn't get added as an image to that last post, here it is

Update: some ideas to monitor

some ideas to monitor

Posted by matt on 23rd of Jan 2020 at 05:51 pm

here's even more setups to monitor, nice patterns

CIEN - Chart Link - tight coil

AGRX - Chart Link

DISH - Chart Link - nice base

DLB - Chart Link

EB - Chart Link

earlier I posted the 2hr

120 min SPX BPT MA

Posted by matt on 23rd of Jan 2020 at 05:28 pm

earlier I posted the 2hr chart with the BPT MA which I said went red and didn't go back to green yet, however I said that price was below the ATR indicator. HOWEVER that's only true if using a sessions hr chart, if one uses a natural hrs chart instead price did not break the ATR.  See both images, both are 2hr time frames of the cash SPX.

What the heck is the difference between a Sessions and a Naturals hours chart?  To example a 2hr chart does not dividend evenly into the cash trading day as there's 6.5 hrs, 2 does not divide evenly into that as you have a 30 min bar left.  The Natural Hours chart has that 30 min bar as the first 30 min of the day, while the Sessions Hours chart instead has that 30 min bar as the last bar of the day.  So which one is the best, who the hell knows LOL, it's all just minutia

note even with the rally

120 min SPX BPT MA

Posted by matt on 23rd of Jan 2020 at 04:04 pm

note even with the rally in the afternoon, the BPT MA Deluxe did not go back green on the 2hr time frame yet, and price still slight under the ATR now

some ideas to monitor

Posted by matt on 23rd of Jan 2020 at 03:37 pm

CTMX - Chart Link - note downtrend line and MA Ribbon pinch

BBIO - Chart Link

BBIO - Chart Link - 2hr view for closer view

T - Chart Link - breakout

VFF - Chart Link - looking for support on broken trendline after high volume break

Update: SPX 5 min update

SPX 5 min update

Posted by matt on 23rd of Jan 2020 at 02:03 pm

$SPX - Chart Link- you can see a few day trades the 5 min provided

1 - the short off the bounce in the morning on that bearish MA ribbon squeeze

2 - double bottom around 11:30

3 - a bull flag long just after 1 pm and also note the fast MA ribbon had a bull squeeze there

anyway despite the back and forth you can get day trades on this stuff if you look for patterns and triggers

GDX comments

Posted by matt on 23rd of Jan 2020 at 01:55 pm

GDX - Chart Link - and while some of the gold stocks have given trades, my uneasiness with that market is that it continues to get bids when the general market is weak (this morning) and then sell off when the general market rallies - see what happened today, it was strong in the morning when the market was down, and now that the market has rallied off the lows it had sold off (and a H&S pattern formed).  It acts like it only wants to rally if the general market sells off. Longer term I want to see GDX rally despite what the general market is doing

anyway enough rant

anyway short term nice rally off the lows, the correction from yesterday has been corrective/choppy and not impulsive so it's a correction in an uptrend. that said it's too early to call that it's over, We could have a wave A down and this a wave B up lower higher then one more pullback or go sideways and form a triangle. We have almost filled today's open gap now

otherwise zooming out, the main support is the uptrend lines I showed on the 60 min and 120 min charts, they have not been broken at this time. Let's see how the rest of the day unfolds, especially the afternoon.

guys - it's not all

Powell is hard on the buy button now.  

Posted by matt on 23rd of Jan 2020 at 01:46 pm

guys - it's not all the FED, well they started this but here's what I keep preaching.  Too many people are looking for the top. I just talked to a financial advisor I know, he's a typical adviser with a local office with probably 100 accounts mostly mom/pop families who generally buy and hold. These are people who typically ride 10% corrections down without a concern.

Yesterday he got a call from 5 of his clients (these are mom/pop not traders, not sophisticated) they talked to him yesterday all concerned about the market asking: should we lighten up, the market is very overbought etc.  

You have laymen, mom/pops, everyone getting bearish on an instant!  

that's not how stops form. You need these people to be complacent and not concern when the market has tiny pullbacks. 

so while the FED started it - all these people who genearlly buy and hold but are now getting hyper bearish on a dime - they are the ones who continue to fuel this market.  

120 min SPX BPT MA

Posted by matt on 23rd of Jan 2020 at 12:30 pm

the BPT MA is red on the 120 min, therefore when/if it goes green again that could be a new higher low stop

otherwise as you can see price today bounced off the ATR trailing indicator for now

SCHN follow up

Posted by matt on 23rd of Jan 2020 at 12:21 pm

SCHN - Chart Link - one of he short ideas from last week and weekend

SPX 5 min update

Posted by matt on 23rd of Jan 2020 at 12:13 pm

$SPX - Chart Link - trying to post this a 3rd time, each time keeps screwing up

so after the first bounce of 14 points off the low we essentially had a double bottom and now on another bounce, the 14 point bounce on the first move can use as symmetry for this one. Currently this one about 10 points 

SPX 120 min and 60 min: support levels and symmetry

Posted by matt on 23rd of Jan 2020 at 12:08 pm

$SPX - Chart Link- shows support is the uptrend line from the early Dec lows, and as far as symmetry the last pullback was just over 30 points in early Jan - which you can reference for symmetry

$SPX - Chart Link- 60 min view

Update: SPX 5 min

SPX 5 min

Posted by matt on 23rd of Jan 2020 at 11:25 am

$SPX - Chart Link - updated view, again that V bounce was a nice day trade short. If one had covered some of the SPY system short, could have added back on that bounce since system is end of day. 

HYG and SPX correlation

Posted by matt on 23rd of Jan 2020 at 11:19 am

HYG - Chart Link - to me the weakness that started in HYG earlier this weak was a clue

Correlation Compare SPX vs HYG - Chart Link - here's a correlation chart I made SPX vs HYG, with bollinger bands on the correlation, notice when that falls below the Bollinger Bands you tend to get correction

johnon CDE it basically had an ABC like pullback down to support, doji from Monday with yesterday being the ideal entry off the doji. If you are long logical stop at that doji low, first resistance is 9 EMA


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