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DIA

Next Week Trade Plan: $82 Expected Move + Gravity Points + ExtraFor what it's worth, I don't have any Gravity Points identified under the "Gravity Point Very Hard" Chart Dump this week. See what I see. Last Week's Post Other Relevant Charts: (One Last Rally) (Interesting Development) (Kings Crown) (Extremely Useful) (Combo Equal-Weight Indice Chart) (Extremely Useful) (Should've made it public) (Semi-Useful) (Just for fun) Sector & Indice Trendline Watch: I use a fan of different trendlines from different anchor points (candle wick, candle body, Day prior, Day after, ect.) and connected them in a similar way to 2015/2016 Lows to capture a more complete picture of the trendline. That way I'm not second guessing if the trend is broken or not because I have all of the possibly variations already displayed. See Below: Indice: (Broke?) (Very Weak) (Hanging on) Sector: (Strong) (Very Weak) (Struggling) (Broke) (Still Well Above)
CME_MINI:ES1!
by RHTrading
4
Next Week Trade Plan: $70 Expected Move + Gravity PointsVolatility Expansion from last week's $62 Expected Move. I actually expect us to burst to the upside and then Fade for the rest of the week. You can see the 'Event Risk' being priced in because of the G20, but on Monday we have a $47 Expected Move in one day alone. I marked this in Yellow on the screen. Interestingly enough, Monday's $47 move brings us up into the next Gravity Point and where we've failed twice before at 2811. How much would I trust the Expected Move? Less than usual. The market place is trading inefficiently. We just had two weeks in a row where we exploded outside of the expected move, both to the downside and last week to the upside. How to look at the Expected Move: It's a probability Distribution. Imagine the bell curve. 68.26% of the time price will remain inside of the Expected Move. So pretty much 7 out of 10 weeks. This gives you an edge of 20%, where 50% represents completely random (no edge). 95.4% of the time Price will remain within 2 Standard Deviations of the Expected Move. 99.74% of the time Price will remain within 3 Standard Deviations of the Expected Move. Last week we had a 2.5 SD move to the upside in relation to what the Option Market had priced in. --> This means the marketplace is priced inefficiently. The week prior we also broke outside of the Expected Move by about 2.5 Standard Deviations but to the downside. These are extremely rare events and does not diminish the effectiveness of this strategy. I like to couple the Expected Move with Gravity Points, which is my suggestion for this week.
CME_MINI:ES1!
by RHTrading
1
Up in Smoke? Nope, just getting lit!Shares of MO have been under tremendous pressure since the FDA mentioned banning methol cigs/e-flavors, but don't let that fool you. This cash cow has plenty of firepower to withstand this minor hiccup and as shown on the chart, has fallen exactly to trend line support going back to 1969 (almost 50 years). This is a screaming buy! I'm already long shares, selling covered calls against to boost income. I'm adding aggressively on this decline. I'd do the same if I were you!
NYSE:MOLong
by EchoAlphaBravo
S&P 500 Trading Plan: Gravity Points + Expected Move ($62)Our first expansion of Implied Volatility in 3 weeks. Last week was $47 Expected Move, this week's Expected Move is $62. I'm not sure what this next week will bring us, my bias short term is to the upside. There's a confluence of support right below us at $2,600. But at the same time I don't like the long trade unless we see some extreme capitulation-esk move early next week with substantial volume. Last week we saw a 3 sigma move that actually closed OUTSIDE of the Expected Move which means that the options market isn't adequately pricing risk in the marketplace. 9 times out of 10 it closes inside of the Expected Move. We saw this in the 3 prior weeks of trade. Watching JNK closely, Need to see it turn around. Watching the Financials closely at this level. Really need to see them above $26.50. Watching Boeing closely, Boeing needs to stabilize if the Dow is going to rally. (UNH (Up 20% YTD) is the 2nd largest constituent of the Dow, and I will be watching this closely as well). Watching Rotation of sectors, specifically Defensive names for downside continuation; KO, JNJ, PG, MRK, PEP, VZ, MCD, Healthcare/Retail/Discretionary/Real Estate. I haven't been able to form any theories on where money will rotate into yet. Last Week's Trading Plan: Goodluck out there Gentlemen, -RH
CME_MINI:ES1!
by RHTrading
SPY: Bullish Case / Indicator StoriesWe have a strong bounce here pre market. This honestly looks pretty strong to me. This is my 15 minute time frame. Hey, I'm not a permabear I promise. This is the earliest timeframe that I could find a bull case for, and thought it was convincing. On my Stochastics on the bottom of the chart; My longer term Blue Stochastic has risen above the lower black threshold line (40) for the first time in a long time. This comes after my Blue Stochastic has been diverging for several days now, and the Shorter Term Stochastic also shows a divergence. On the RSI on the Top of the Indicators; Momentum has clearly shown strong buying pressure at this time resulting in a powerful move higher in price. Clear divergence on my Shorter Term RSI Black Line Longer Term RSI Red Line has moved decisively, with conviction, over the center (50) line. This comes after an extended period of time spent below the center (50) line. Strong breaks above the center (50) line often stay above the center line The shorter term RSI Black Line has risen above my Upper Black Line Threshold (62) so which allows me to rule out false bounces mostly, and breakdowns.
CME_MINI:ES1!Long
by RHTrading
S&P 500 Trading Plan: $47 Implied Volatility + Gravity PointsLast week's Implied Volatility was $49. This week's Implied Volatility Expected Move is $47. So another volatility contraction right? Wrong. We've got a holiday next week folks and we've got three and a half trading sessions. Given this, I'm inclined to say it's going to be a pretty volatile week. I zoomed in to the 15 minute time frame here, as opposed to my usual 30 minute chart because I wanted to show just how extremely accurate and important these Gravity Points have been for weeks and weeks now. Use them. I intend on making another 30 minute time frame just for continuity and bigger picture. Last Week's Trading Plan: - Incredible action last week here. - On the button we came back inside of the Implied Volatility Expected Move.
CME_MINI:ES1!
by RHTrading
S&P 500 Implied Volatility ($50) + Gravity Points = Trading PlanAnother contraction. Last week = $65. Next week's Expected Move is $50. I don't like it. I don't have to like it. Why do I care? Historical volatility is still outpacing implied volatility. $50 is what we moved in 1 trading sessions last week and right now that same move is what's priced in right now spread over the whole week. I didn't like last week's $65 Expected Move and you can see that we moved well outside of it before ultimately coming back into it on Friday which creates opportunity for us if it moves significantly outside of the $50 range to expect it to come back inside the range. There's a tremendous amount going on right now. Everyone got caught up with the elections and what-not last week, but it was also the first week, if you were paying attention, that we now have HARD evidence that we are seeing a slowdown, specifically a slowdown in your Wealth-Effect companies. (TIF / Ferrari / Marriot / Wynn) Do we point fingers at the FED? At this point who cares. We know that they're pulling the rug out from under us. We should just simply expect more volatility. And it is clearly and distinctively underway by the fact that 45% of companies in the S&P 500 are now in bear market territory. This is going to be absolutely brutal for retail clientele. Why? Because the market is excellent at bringing people out of the woodwork and pulling their capital back into the marketplace. Who do you think got suckered into this Rip-Your-Face-Off move to the upside over the last 2 weeks? Institutions are selling their shares to Retail right now. Algorithms are going to systematically and over time dismantle individual sectors and the market at large.* *cough *cough XHB/EEM/SMH There's so much opportunity out there right now. Here is last week's post:
CME_MINI:ES1!
by RHTrading
3
DIA index is bouncing back from MA and trend line -> BuyHi Traders! AMEX:DIA index is bouncing back from MA and trend line on the daily chart. RSI and Stoch RSI are in oversold area. Price closed above the 200 Moving Average and ascending trend line. Still on uptrend with recent correction. => good long opportunity If you think this analysis is useful and you want to receive new updates about this idea, leave your comment or your LIKE! Thank you for your support and may the markets be with you!
AMEX:DIALong
by paintek
1
S&P Expected Move ($65) + Gravity Points -Next Week Trading PlanIt's getting dicey out here. Huge moves in the market this last week. Last week $90 expected Move. We moved all of that and then some. Next week only a $65 expected move. We saw that kind of action in the S&P's on Friday. All of next week, we're supposed to move $65, but we did that on Friday. I anticipate the price action will move OUTSIDE of the expected move. Here's a more "Busy" chart on the 15 minute for active traders: Good luck next week gentlemen, - RH __________________________________________________________________________________________________________________________________ Some other work I've done recently: Redid my trendlines for the 100th time. The two multi-trendlines and one final trendline from the (2009 Low - 2016 Low) & the (2009 Low - 2nd 2016 Low), (2009 Low - 2018 Low); This is a big deal. https Recognize that if this breaks, it will be resistance on the way up.
CME_MINI:ES1!
by RHTrading
Prepare for a rough landing!The major indices have faltered several times this year, but this most recent slump seems to be the beginning of something more severe. First, the basics. The white trend line, which goes back over a year, had held as support during previous downturns this year, but not this time. In fact, it's now became resistance. Also influencing sellers is the 200dsma at 2765, reinforced by the 50% retracement of this recent decline at 2772. More importantly, the 50dsma is aligned with the 61.8% retracement of the same move, so that's an extra layer of resistance at 2812-2820. We also put in a minor double top, but it's not strong enough to pose a threat to a bullish advance (if that happens). Speaking of bullish, I see two things that are bullish to a degree... first, the MACD has signaled to buy (yellow circle). Second, we have a bullish divergence in the R.S.I. (yellow trend line). However, I can't help but notice that volume is accelerating on the down days, and we're slicing thru supports like they don't exist, so it makes me more cautious than usual. In fact, I think we're headed back to the lows set earlier this year at 2533, and I even think there's a good chance we extend on down to the 127.2% extension at 2422 (which coincides with major support at 2404). In short, I'm raising cash, taking profits, hedging with puts and selling covered calls against my core holdings. This could get nasty pretty quick, so consider yourself warned!
SP:SPXShort
by EchoAlphaBravo
1