Thanks so much Steve, having these figures greatly improves my risk/reward and helps me with inventory management! Protect, monitor, and adjust. Super job you do here day in and out. 

XBI my spread is bearish now into this premarket rise. Has a gap below at $80.98 from yesterday that I don't think holds on a swing trade. Will continue to add if it rises more. I put this entry on at $86

LABD/LABU

The bankers have always been a good guide for me. I was a banker in my early days. I have watched Dimon and other CEOs as my guide. When they sell, pay attention, when they buy pay attention. Using this strategy saved me during the 2008-09 period. I was able to sell my bank stock at 78, buy back at 32 (it would later fall to 16! but I held and got more), and later sell it all again in the 100s. No need to complicate things. Let these guys do the work for me. It is their job after all.

Worst case is these guys keep me out of big trouble. Best case is they make me a bunch of money. Adding this information in with where markets are and the backdrop, buying supports really increases the success ratio. From there, I just need to give it time. If Dimon isn't buying more yet long term, neither am I. 

Being prepared allocation wise is warranted at all times. I expect any long term money I have to be able to withstand a 40-50% drawdown at anytime. That's the world we live in. Viruses, debt, scams, wars, and who knows where it all starts and stops. 

One thing is certain, the stock market is a great opportunity to make money if buying and selling right over the long term. 

WMT restructure after that profit warning a bit back. Cutting jobs 

$SPX just six gaps below now..they are setting this up so good for a big pullback at some point. All psychology. I'll make money in the meantime. 

Fed’s Daly says ‘our work is far from done’ on inflation; Evans says bigger hike ‘OK’: 

https://www.cnbc.com/2022/08/02/feds-daly-says-our-work-is-far-from-done-in-raising-rates-to-tame-inflation.html

Another insight from my trading diary that I felt worth sharing:

I've found that doing endless charts with multiple scenarios is just as much noise as watching the news everyday. It only makes my head hurt and distracts me from what is important. Today. Today is all I have in life, be it trading or anything else. 

And I've seen enough of weathermen out here on youtube, twitter, board sites, etc. that post every scenario then eventually one of them comes true and they take credit. All the other charts disappear, it is comical. In real trading/investing I have to actually pick a side and stick with what I'm doing for whatever period of time that is. 

It has been refreshing to be in this community in that it has been clear what is being targeted during a period of time. It was clear a bear market was being looked for when stocks made new highs in 4,800s and talked about for months and all while it was going on. It went all the way down to 3,600s. Then it was suggested markets would have a substantial up move, which took place. Some damn good forecasting here. 

The most recent notice has been to get cautious as markets rise and if we get that 4,220 area move, to get even more cautious. It is always encouraged to raise stops as well, so protect, monitor, adjust should be on everyone's mind by now. Great reminders are worth repeating.

Another thing I was just considering, if I don't want to be concerned with all the noise, I can simply be aware of the forecast and just take the trading alerts. No time investment other than checking back end of day to see if any buy or sell is being made. 

SPX a good amount of option premium to be burned if markets can stay above 4,017. Lots of premium out there for August 19. All controlled and planned, though I'll go with their flow as it is all I can do. 

My first gap target at 4,072 in play now, let's see if we get there. The 9 day is after that. 

I'm tracking 4,220 because I want to see you wearing that hat with the bull horns on it haha 

*PELOSI TO ARRIVE IN TAIPEI, CAPITAL OF TAIWAN TOMORROW NIGHT: SOURCES - TVBS*CHINA FOREIGN MINISTRY SAYS COUNTRY’S MILITARY WILL ‘NOT SIT IDLY BY’ IF U.S. HOUSE SPEAKER PELOSI VISITS TAIWAN-NewsWire

The slide at 2:20 of the video is the rub. Shows the argument of recession or not and right now nobody knows. I took a look at the yield curve 10/2 chart again and the 1989 inverted curve which was later followed by the 1990 recession. The SPX didn't go lower even though the curve was inverted and the recession happened. In the other cases shown 2000 and 2006, the SPX did have a major decline after the inverted yield curve. We know in the 1970s it went lower as well.  

The 50% fib rally retracements are wildly similar. And that's all anyone can do, look at the past, and see if maybe it can rhyme in comparison to today. I like what he said about this is a "highest odds projection". Also congruent with the information I mentioned above. That's all anyone can do, make a high probability move based on the risk/reward of the situation. It makes the odds that this "bear market" is going to last much higher, particularly noting all of the backdrop challenges that I posted here on Friday which are worth repeating. Here they are again:

If we ignore that earnings were bad, guidance was worse, inflation is worse, 2nd consecutive negative GDP print, 2nd consecutive 75bps hike, double QT starting in a month, China tensions boiling, Russia war continuing, supply chains not improving, oil shortage not improving, oil reserves dropping near record lows, PMI dropping in recession levels, consumer sentiment at record lows, personal savings at 2008 levels, credit card debt at record highs, housing market turning down, multiple yield curves inverted, the dollar at 22 year highs... yes maybe we could believe the bottom is in.

I was thinking, if the market continues higher and this is wrong, there would be plenty of time to make money if trading or investing. It would just take willingness to continue to be flexible in one's view. The approach I've operated from for years in life has been "stay in business first, make money second". Meaning, just don't make a mistake that I can't recover from. There is always another trade/investment if one has the capital to participate. 

The other thing I thought of over the weekend was, am I spending too much time on the "trying to figure out the future"? And not enough time of the "enjoy life" today? Yes, there is a time and place for planning and action on the plan. Though once that is done, it is done. Even if I'm successful and make loads of money, if I didn't enjoy life, or the relationships that are important to me, or relationships are ultimately sacrificed, then I didn't really succeed in accordance with my values. Worth consideration and repeating again and again for me. 

SPX first gap in 4,072 area. Let's see how things react when we get there. Lots of room for downside for this pullback. I think the 9 day was at 3,997 when I looked at the longer term chart on Friday. 

5 gaps below now. A great trader told me once when you get too involved emotionally, take a step back and look at the chart. And right now the best hand is to be looking for downside as markets bump their head on resistances.

No need to add to longs quickly here. One day at a time. I'll see how it closes tomorrow and reassess. 

Preparing for a trip on Friday as my good friend's Mom passed. Great lady, 88 years old. So I'll have to decide whether I'll be in cash or just make adjustments on the close. Traveling Monday as well. 

Making daily money is tough to pass up though sometimes having my time to myself is worth it. 

I'll definitely be in cash for my wife and I's cruise in the trading account the last week of August. I'm planning to close out the week prior, Thursday or Friday in preparation. I'll have to be satisfied with going away on a high note. Going to cash makes so much sense as I won't even have to carry a phone for a week. 

This has been a Rockstar indicator. Thank you Matt!

Steve, Thank you! I've reviewed all of your posts and Matt's and am ready for the week. 

That 1.618 education off the pattern and waves furthered my base of knowledge, understanding, and application.

It takes time being through these cycles for it to sink in but glad I've kept at it and for the support here. It has taken me years to learn to trade. My prior experience was long term investment swings into extraordinary conditions on the buy/sell sides. 

Trading compliments my other strategy well as it gives me alternatives when things get tough and permits me patience for my longer term ventures. Add in other cash management, fixed bonds, etc and it rounds me out. Less is more.

If we get that 4,220, your hat with the bull horns on it is gonna look good on you. Haha

WMT recovered the entire profit warning loss in 4 trading sessions. $119 back up to $132s already. I rebought into that warning as it tested 119-120 again, after owning for a 13 buck move prior. No way to have known they would have warned, just blessed on my timing as I tightened up the position into strength. 

I trimmed some again on Friday after this move and still have some left. Stocks like this are wonderful when you get a huge sale. Two of the Walton family are on the most wealthy list. His wife and grandson. Risk/reward

DIS still riding here from the $90s and trimmed some Friday in $106s. Same thing, sell some, keep some, trim/trail. 

SPX QQQ This past month is looking like evidence that we never had a bear market. I guess the definition of bear market is back up for debate as well. To me bear markets require time and price, meaning it lasts more than months, it would last more than a year into two. We haven't had both time AND price. Every time it has gone down in the past (not including that 70s-80s period), the Fed has come to the rescue. 

So it makes sense why the debate has been so active in regards as to whether we are in a bear market or not. We need that next leg down and we need to go into next year without markets going back up. If we rally and/or don't make new lows this year, this will be seen as a correction, not a bear market. And I think that would be correct. It is an important discussion because while most of us trade day to day with some of our money and can adjust, the majority of people invest. Tough environment to say the least for all the reasons I posted prior in the backdrop. Proof that the economy is still vulnerable. The question is if it matters or not to the market or has been priced in. Some believe a recession has been mostly priced in. And it in fact could be. 

*CHINA STATE MEDIA MOUTHPIECE SAYS CHINA WILL SHOOT DOWN U.S. FIGHTER JETS ESCORTING PELOSI IF THEY ENTER TAIWAN AIRSPACE-NewsWire

Pretty bold and it doesn't seem likely she would stop in Taiwan, though very serious business to China either way. I didn't realize it has been since 1997 as noted in the article you shared since the last visit there. 

The geopolitical has been on the back burner for a bit with inflation, earnings, and economy being the central themes while stocks rose on bad news this past month. These tensions remain:

https://www.nytimes.com/2022/07/28/us/politics/biden-xi-call-china.html

QT is just starting, putting markets further at risk. Sentiment is holding things up right now, if it changes, look out. One day at a time. 

Fantastic call and discipline holding that long for weeks Matt! Kudos to you and Steve! Have a great weekend! 

I won't argue with the price, though we have a 67 long term rsi, wildly extended here from the 9 day at 3,997. I was considering this a bottom though we have 5 gaps below now and this all to consider:

If we ignore that earnings were bad, guidance was worse, inflation is worse, 2nd consecutive negative GDP print, 2nd consecutive 75bps hike, double QT starting in a month, China tensions boiling, Russia war continuing, supply chains not improving, PMI dropping, consumer sentiment at record lows, personal savings at 2008 levels, credit card debt at record highs, housing market stalling, multiple yield curves inverted, the dollar at 22 year highs... yes maybe we could believe the bottom is in.

What a difference a day(s) makes as the song says..

They're backkk..it's transitory after all.