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Spike-trading

Why Buy LLY?A textbook spike trade... that's why! Every morning the stock market open gives us opening volatility spikes on the first 30 minute bar. Most are noise but when that rare one comes along that fits my rules AND has multiple matching confluences... it's time to "Strike at the Spike!" This setup has going for it: At a 50% Retracement of the recent trend (from November 18 - December 4) At the top of a Gap Level At the Volume Profile Point-of-Control for the last year of price action (see below) With a Spike that my indicator shows >80% ATR Clearance I consider the baseline for a trade; this one is 150% so it definitely fits the rules. I would take a spike if there were only 2 of those matching levels above. Targeting the local high for the first take profit at 834. Here is the Daily chart for just how key this level is: Full disclosure: NYSE:LLY is and has been one of my biggest holdings; having owned the stock for over a decade.
NYSE:LLYLong
by norok
Look for Spikes to get Long EthereumLate to the crypto bull run? Maybe not! Technical Analysis is not about predicting the future... it is about identifying opportunity. COINBASE:ETHUSD has been bullish for a few weeks and I've been patiently waiting for it to trigger a setup. I got what I was looking for on Tuesday of this week and it made for a great teachable moment combining my Spike Indicator, 50% Retracements, and Volume Profile. Another "MUST TAKE" opportunity that traders should study and look for...
COINBASE:ETHUSDLong
by norok
1
Bitcoin FAILED 100k!INDEX:BTCUSD FAILED a breach of 100k! Now it has setup my Spike indicator perfectly for a 3:1 Reward/Risk back down to retest the prior ATH at 73811. I could not have asked for a better setup. I refused to short this rally... knowing better than to get in the path... waiting for a signal. That has now happened. This has been the most interesting Daily candle of the whole rally. Over the past 24 hours the social media sentiment has gone from exuberance at the break of 100k to now slamming back down inside the prior pre-100k high. THEN... right before the bar close a volatile selloff. How, why, does not matter. A chart is a record of human emotion expressed in price. The party could be over.
INDEX:BTCUSDShort
by norok
11
XYL Multiple Levels of SupportAlso on my morning Spike scanner came up NYSE:XYL (see below for the spike on the 30m timeframe). I especially like this Support level as it has many matching components: 50% Retracement Level. My bread and butter. The most important Retracement Level. Volume Profile node. Not the POC but a key level of price and volume here. Ichimoku Cloud. A long flat SKB with the Lagging Span far away from crossing into bearish territory. This is the Spike that triggered me to look and find price acting such a way at Support: The take profit target is easy to find; the POC on the Volume Profile for the bullish trend. The stop is between the current VP node and the next significant one (which could be next support but no reason to take that much risk).
NYSE:XYLLong
by norok
Bitcoin Spike at ResistanceBitcoin HELD the Last Support noted in my Idea last week. That save INDEX:BTCUSD from going bearish. However, it is not out of the woods yet. Today Bitcoin spiked the 50% Retracement Resistance at 64652. This sets up a short trade where if the high of the spike is broken "you know you're wrong" for a low risk/high reward trade. If the Spike high is broken... Bitcoin may trend bullish and even resume the full bull trend onward to 100k+. However, if this spike is a reversal and price retests the lows of last week, this will trigger a full trend flip to bearish via the Ichimoku cloud.
INDEX:BTCUSDShort
by norok
1
ADBE at Volume Profile NodeThis morning NASDAQ:ADBE triggered a Spike Alert on the opening 30 minute bar. I double checked this signal against Volume Profile. On the weekly there is a major Volume Profile node at 480 considering the bullish trend from September 2022 to January 2024. The spike this morning touches this level and have moved off with a significant Spike: The Spike allows me to start a trade on the 30 minute timeframe with low risk and a 3:1 Reward/Risk ratio with the intent to play the higher timeframe Weekly move as a major pullback. If we increase the time considered the Volume Profile node becomes even more significant as the POC (Point of Control) for the price action going all the way back to COVID low.
NASDAQ:ADBELong
by norok
3
Trading Bitcoin FuturesTo keep actively trading Bitcoin short... I am watching and trading Bitcoin futures. This morning there was a 30 minute timeframe Spike right at the level I have been watching since after the ETF launch: the 50% Retracement of the "Sell the News" phase. I am looking for price to hold this level as Resistance and retrace at least back to 41000 in short time. Higher Timeframe Update: The area of Resistance that is the 50% of the ETF Selloff is where Bitcoin has retraced to over the last week. On Monday 1/22 I was able to hedge my Puts by selling shorter dated Puts against them to hedge and offset theta. I closed them yesterday. Broadly, Bitcoin is still in this battle zone from the ATH to the November 22 low. Mainstream Adoption Back in the old days... Bitcoin was best traded spot on margin on exchanges. Now, all the reputable exchanges are KYC and the new ones popping up would never fool an old timer like me into putting money there. I have even received spam here on Tradingview from exchange reps trying to get me to do affiliate programs. No, never. Bitcoin is now a heavily traded asset with countless derivatives. It is truly mainstream.
CME:MBT1!Short
by norok
2
JP Morgan Short off All Time HighWith the stock market making new All Time Highs fresh new opportunities for contrarian trades are going to be somewhat scarce. Thanks to a viewer on my Livestream (every Friday on Tradingview: 4pm EST UTC-5) I was made aware of a short setup I like on NYSE:JPM Context This price action is happening at a test of the past ATH set in November 2021. Last week the Earnings announcement pushed price intraday above the high only to close well below the key Resistance level of the former ATH. This is a false breakout signal or as I like to identify them as: Spikes. The Spike The Spike occurred on Earnings. I have found that false breakouts on earnings have a very high probability of signaling a reversal. The significance value (135% ATR) is within my rules. It took until the following week for price to actually pull back to the proper entry point of the Spike bar's Tenkan Sen value at 172.48. What these factors mean I go over during my Livestream. The Trade How I am expressing this trade is in a combination of short shares and Puts. In choosing my Put strike I look for where I see price going as a target via technical analysis. In this case it would be the 50% Retracement of the bullish trend around 155. For expiration I consider the prior bullish trend that got price up to the high I am reading as a false breakout to enter. I project the time that trend took, add an additional month as a time buffer, and then typically take that expiration. Unfortunately, an option expiring in March as this technique would suggest puts the expiration too close and just before earnings. A note about options and earnings: In the 4 weeks prior to earnings very typically a stock's options will experience a rise in IV (implied volatility). This rise in IV and the Greek Vega can increase the prices of all options often offsetting the value lost to theta time decay. This is a very advantageous condition if a trader is long single options. Therefor, I chose the April expirations to give myself the potential for the IV push. I will likely close the options the day before earnings regardless of where price may be. Options are a coin flip.
NYSE:JPMShort
by norok
1
Bearish Bitcoin Spike on the Weekly"Buy the rumor/Sell the news" is a phenomenon as old as markets. It was like betting on the sun not to rise tomorrow. I have talked to many Bitcoin enthusiasts who are perplexed by this occurrence. They were assured by various Twitter personalities that this week would see the largest inflow of capital into Bitcoin ever, price would rise, and if they just bought prior to the news they would make tremendous gains. This was never going to happen. With the close of the prior eventful week's candle we now have a confirmed price Spike on the INDEX:BTCUSD Weekly. On Wednesday amid the "buy the news" nonsense price briefly surpassed a major high set in March 2022 only to retrace the entire ETF launch and then return to the bottom of the prior range. This is a very bearish signal from which price does not typically recover. The first level of Support will be found around 32.2k; the 50% Retracement of the rally since November 2022. The most ironic, and most likely outcome, is that price retraces the entire ETF hype rally. Breaking the ETF news high would of course resume the trend upward but at this point despite the memes circulating Twitter trying to reassure all to HODL that is a very low probability with the price action we have seen. I remain short Bitcoin via pre-existing ETFs such as AMEX:BITI and will be adding to them during the coming week. Wall Street is not coming to save your longs...
INDEX:BTCUSDShort
by norok
66
Bitcoin Spike on DailyOne of my primary technical analysis trading tools is that of False Breakouts or as I identify them; Spikes . I have found that when prices moves quickly in one direction only to return in the opposite direction within the same or following candle this indicates a potential reversal with a high probability. The corollary to this concept is that if price does then break that "spike" bar the trend can be confirmed. The Spike I have been watching the price action of Bitcoin exceptionally close over the last few weeks as the 2023 bullish trend approached and has stubbornly held a major Resistance. On the first US market open trading day of 2024 Bitcoin made a push to break the recent consolidation. However, the following day Bitcoin price reacted with a nearly -10% drop. Such a daily move is not uncommon in Bitcoin but where and when it happened is significant. I operate under the logical thesis that if something is bullish... it should GO. There should be no such major rejections if the trend is strong. To have such a sudden rejection qualifies as a "Spike" and I created an indicator that identifies these for me to filter out the noise. That is exactly what happened at this point and place in Bitcoin price action. This spike bolsters my conviction that the 2023 bull trend of Bitcoin has reached its zenith. The Levels If this spike proves to be a bearish reversal then the supports I identify based on past price inflation and 50% Retracements are: 35,400 30,700 If price surpasses the high of this week significantly the next level of Resistance is the March 2022 high of 48,200: Expressing the Trade Contrary to popular memes there exists already Bitcoin based ETFs. Rather than deal with the theta decay aspect of options the symbol AMEX:BITI is the SHORT Bitcoin ETF. The price action is distorted but it also exhibited the Daily Spike price action. This instrument is the one I will use to express bearish trades on Bitcoin going forward. I talk about my Spikes as a trading concept often during my Weekly Livestreams here on Tradingview. You may also follow my last few years of Bitcoin price action analysis in the links below to see how we got here. Trade wisely!
INDEX:BTCUSDShort
by norok
6
Netflix Identifies ResistanceWe have been watching this stock for a while during my weekly Livestreams (Fridays 4pm EST UTC-4). Last Friday, we noted that NASDAQ:NFLX has pulled back up to retest the 50% of the July Weekly Spike price action. This is happening following a long bullish recovery trend up to the MAJOR Weekly 50% Retracement Resistance of the November 2021-May 2022 bear trend. The price action has defined itself clearly with the July high. The risk and wrong occurs with a breach of the July high. With this in mind we can define a high risk/reward trade to at least a 3 to 1 down to 257 and possibly beyond to retest the major low from 2022. Implied Volatility is below average which is good for options. However, this is NOT a trade that can be effectively expressed with low duration expiries even though it might be tempting due to the high cost of the stock. To express this trade one must go well into 2024 expirations or short shares.
NASDAQ:NFLX
by norok
4
Target-ing (TGT) a LongThe Setup Target NYSE:TGT has had a very bearish fall off All-Time-Highs over the last 2 years. It has finally retraced the entire length of its run from the 2019 Pre-COVID High and returned to it as potential Support. Price MUST hold here or else continue down to lower levels in the "Valley of Risk". It is worth a trade off this level. The Trade: Today on the opening 30 minute spike we got such an opportunity for a low-risk entry. The price spike had an acceptable ATR Clearance per my rules and happened on the 50% Retracement of the June low to June high. The first Target is the June high with a following target of the 50% Retracement of the 2023 bear trend around 153.39.
NYSE:TGTLong
by norok
12
Norwegian Cruise to get back above water?When's the last time anyone has looked at cruise lines? I remember back in 2020 cruise lines were the "value trade". It worked for a while after the pandemic drop... the price of these stocks recovered. NYSE:NCLH did a recovery back to the 50% Retracement Resistance of the drop itself... but could not quite get its head back above water. Yet another in a long list of examples of why 50% Retracements are so powerful. The price action over the last year has setup higher lows and higher highs. This gives some confidence to a true recovery. This morning I was alerted to the stock by an opening 30 minute price spike and false breakout of the last week's range. This sets up a good reward/risk trade with an entry at 12.51.
NYSE:NCLHLong
by norok
1
Gold Bugs Squished?I've been talking about Gold COMEX:GC1! hitting a major high for my last two Livestreams (catch them Friday at 4pm Eastern after the market close). The current price action warrants a standalone post. Each Livestream for many months has had at least one person ask what I thought about Gold. It was very simple: Gold was trending UP to test the major Monthly highs. In many of my social market chats about two weeks ago my gold bug friends began getting very excited. I urged caution. Price MUST break the high and confirm the breakout before getting long at this major Resistance Level. Now it looks as of gold price is respecting this monthly high from the last few years. To be contrarian I had to short Gold (using AMEX:GLD ) based upon a Spike setup from Friday May 5th's high. Last week price pulled back and "should have gone" to retest and break the high. It did not and returned back inside the range. This sets up a short. I also know from taking market sentiment that a lot of traders may have gotten a bit overly optimistic. This could setup for a good pullback to at least the 1850 Level.
COMEX:GC1!Short
by norok
1
Home Depot "Plunges" to SupportAll media invokes sensationalism to get clicks and views to see their ads. Some really play into the doomer mindset of their readers/viewers by selecting stories that amplify the theme of the world/economy/dollar ending and that the next crash is right upon us! I've been reading these headlines every day for over a decade now and it's just the way modern journalism works. As a trader I aspire to cut through the noise and negative bias (and sometimes the positive bias) and ask the more objective question: "what does the price action suggest?" Home Depot NYSE:HD had earnings today and while the news was negative the overall long term trend (on the Weekly timeframe) has not changed. The key low of COVID and All Time High trend has defined most stocks for the last two years and may continue to define them for up to a decade. This past trend sets up a 50% Retracement level around 280.62 which Home Depot stock price has stubbornly held with an auction zone for a year of price action by now. Digging down through the lower timeframes the price action sets up a potential low-risk post-earning trade. The price action of the open poked below the near term low but failed to follow lower. What I would look for is price to hold today's opening action and NOT break the opening low. That sets up a stop for a reversal of this oversold condition while the broader price action on the Weekly is at a major Support.
NYSE:HDLong
by norok
15
I cannot cannot short this...Today's CPI data (down to 5.0% from 6.0% YoY) created interesting and actionable price action this morning... more on my thoughts about it later. Technically the data release created a Spike Alert by punching through the pre-market high and then closing back inside it before the cash open. This is happening within two important contexts: A double top for the price action of April's highs The 4155.25 level which is the most important level of 2023 4155.25 is the 50% Retracement for the entire 2022 bear market. This is THE level which the S&P 500 has been holding all year and stubbornly refusing to break higher. The first time it was hit was the December 2022 CPI data. That signaled the December bear trend to yet another key 50% Support. The next time was the top of the January 2023 rally that got everyone excited. Following the recent February/March malaise price is once again testing this level. The CPI data release has very much driven the highs and low (October CPI being the major bottom) for the last many months. Inflation, and how the Fed handles it, has driven this current era of the stock market (and all risk assets). While the news is that inflation is coming down it is still well above the Fed's target 2.0% rate. There is no guarantee or sign that the Fed will change its mind. Yesterday I sat in on a presentation that juxtaposed the current GDP numbers (which have been recently positive) with the LEI (Leading Indicators) which are sending up a recession signal. I am ALWAYS hesitant to take FUD into account in my analysis. However, the signal is the signal. The trade of this post is based upon a confluence of four factors (news event, spike, double top, 50% Retracement). My rules state that I must trade this... win or lose. The LEI is also a signal that has a high probability of efficacy. It should also be heeded.
CME_MINI:ES1!Short
by norok
39