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DIA

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
Here's how we do it in the pros...On my nonprofit Facebook page , I scheduled a post suggesting your first move of the upcoming week was to buy protection (it was supposed to post on the 1st, but fat fingers screwed it up and it did it the 2nd instead). Looking back, I don't think I can call it much better than this! And no, not a lucky guess... I have plenty of charts on my page to back up my astuteness with this stuff. You should follow me if you like making money, or being right... or both. :) After plunging in to correction territory, we've bounced back higher but remain under stiff resistance. So, I guess you're wondering... What's the market going to do next? After I get through this victory lap, sign a few sponsorships, and cash all those checks, I'll post another chart for what's next! Stay tuned!
SP:SPX
by EchoAlphaBravo
1
S&P: Next Week's Expected Move: $90 (Huge)The Options Market's depiction of non-directional volatility next week. Increase from $66 last week to $90 this coming week. I enjoy this week-by-week update, now on Week #3. I think I'll likely continue this series. Hope you all enjoy it as well. Last week's game plan worked well, pinging from value area to value area. One Gravity Point to the next. For what it's worth, Gravity Points are absolutely in play right now. I do a huge amount of regression analysis in order to decipher these Gravity Points. They're all for the purpose of determining efficiency in the marketplace. They're determined by looking at order flow in the market. These levels are major trading firms, and where they have a large amount of concentric risk. *Gravity Points are used in concert with the Expected Move for the week. There is more downside in this market. Volatility is laughing in our face, not even getting into a 3-handle. A $24 VIX is only barely 1 standard deviation outside of its historical norm. 30-35 is that 2 standard deviation move that we need to see. Implied Volatility IV for SPX options are only at roughly 26%; we need to see IV in the 32-37% range for an oversold contrarian rally. The S&P is laughing in your face saying you haven't seen nothing yet. KEEP YOUR HELMET ON. The markets are still too efficient. If the market's are so "Unprecedented" in terms of volatility, so "Horrific" right now, then how can a monkey like me pick out, within 1 point, the level a twenty six hundred dollar product was going to bounce from? By the way I didn't pick these levels out yesterday, or last week. I picked them out months ago, back in Mid-March. The options market Expected Move was breached the previous week. We had a $66 expected move and we went over that. It's the 5th week this year that the options market got it wrong. The technicals are running the show and will be our only roadmap in navigating these choppy waters. Good Luck Next Week Gentlemen, -RH
CME_MINI:ES1!
by RHTrading
4