DIA Short.Keeping with my bias on the market I believe market structure has been broken and any rally is a short opportunity.
D07 trade ideas
18Feb swing puts on DIAIf you have been following my posts you have seen me share ideas for calls and puts over the past few weeks. On this daily chart, I see price up to the 10sma as a possible resistance, or it may move up to the 200sma near 350 (two orange paths). I do not see bullish divergence in RSI and stochastic %K could make another dip as %D tries to round up. It will stay down if Dow Jones tumbles more.
I am keeping this a small position - bought 18Feb 340 puts at $4.30
Risk Model for Swing Traders (US)Our risk model for SWING-TRADERS (US Stock Market) is still showing a high risk environment.
Swing-Traders should still be very careful and keep risk to a minimum. A very few indicators in our risk model suggest that we may have reached the bottom of the current market correction.
Best way to manage the current situation is to start off with a very few and small pilot positions. If those work and your own portfolio is getting traction, market exposure can be increased.
Some details:
1. Market-Indices (Distribution Days Avg)
The distribution day count according to IBD's model is still showing a market in correction. That means that the price/volume action of the major indices are characterized by institutional selling. Not a good environment for swing-trading.
2. New 52w Highs / Lows
This indicator is still way below 1 indicating that more stockas are making new 52w Lows versus Highs. In a good evironment, you will see this indicator reading higher than 1.
3. Stocks above/below 200d MA
Only 30% of stocks are trading above their own 200d MA. Readings >> 50% indicate a broad market breadth which we currently do not have.
4. Up / Down Volume
Still below 1 indicating that the current market environment is more characterized by heavy selling.
5. Advance-Decline Line
Still in a downward trend. in a good environemtn, this indicator is in an upward trend or at least trending sideways.
6. Volatility Index VIX
Improved versus last week. Now reading < 30% and still falling. Might be a good early indicator that we may have reached a market bottom.
7. Bulls vs Bears
This is a contrarian indicator. Market sentiment is now less bullish which is good.
8. Margin-Debt
Now reading at 17% and still falling. Also a good contrarian indicator suggesting that we may have reached the bottom of the current correction.
DIA - Wobble TopDiamonds ETF Monthly Chart having a grim start to 2022. Wobble Top with wild price swings over the last five months. Jan 2022 has been the wildest yet.
Monthly chart showing a potential bearish engulfing print. With only 1-day left in January will they save it? Even if buyers do come to the rescue on the 31st, indicators point to DIA ultimately going lower in early 2022.
And while buyers may appear to be exiting in earnest this month, based upon an entrenched "BTFD" sentiment, my take is the real selling is just beginning. It likely won't take too much more pressure/bad news to start a real rout.
The dollar's strength/resiliency combined with JPOW's comments and live market reaction this past week are telling. Expecting at a minimum a quick retest of the recent Jan lows in early Feb, and likely sharply lower into March/April 2022. Long volatility and short just about everything else as the baby will likely be thrown out with the bath water this time. Great Reset Indeed.
Not financial advice.
Patience all morning, now DIA putsI bought puts with DIA around 340. On the daily I want you to notice how %K (green) chops around as %D rounds down and back over 20. While %D is below 20, a good time to buy puts for more downside is when %K is over it (especially if stays under 35). Notice in this recent market drop, the green line went over orange yesterday and is back down today. There is more selling likely to come because %D is still below 20. DIA is also very weak if price cannot close over 341.
On 30m chart, price has been consolidating sideways. RSI has come up to 50 and is struggling to get over it. There is no bullish divergence yet on RSI so I think DIA may go lower, though divergence may not occur. Stochastic %D looks ready to round back down.
On 5m chart, not shown here, DIA is stuck under 200sma and gets hammered down as soon as it tries to go up. In the very short term I am bearish on DIA until I see price get over 341 and the 200ma.
clear as mudclear as mud clear as mud , don't you see it? I think that this is the turning point, a new president could save us after Biden crashes the market for us millenials sake. I need a good recession to start putting the heavy hammer down on investments. Its like surfing but on a macro level.
DIA 305/300 Feb 18 Put Credit SpreadThis is an after the fact trade meaning that I made the trade today and it closed today as well. Unfortunately I did not have time to post at entry.
Entry: 0.50 Credit
Exit: 0.25 Debit
50% Profit in a day. Ill take it!
Time to buy calls, Dow Jones will rallyWith volume this high - see chart - and only in the first hour, there is heavy fear selling. Indicators show a bounce will come, so use less capital and hold through the turbulence. In the time it took me to write one line, $DJI went up over 100 points! I say this to stress that your trade value will fluctuate in a volatile market, so manage your capital!
The white rectangles show when I noticed the stochastic warning of a drop in the market. The market still has room to correct down, based on my views of the weekly chart. I have linked last week's chart, which is bearish. Any calls I buy today are for short-lived relief rally trades.
DIA , a long term investment opportunityDIA , a long term investment opportunity.
If the price drops more, I will buy more
Target is about 15% invested Capital Gain
My positions will stay open until the average price target is hit
$DIA, trading it 1/24over 349 351-352 possible
under 341 338-339 possible
#intradayoptionstrading #stockmarket
NO bias, plan for red or green day. chop/ranging = hand sitting
A simple look at Dow Jones - correction coming?Puts did well this past week, and I am looking at a swing position on DIA to hold for more downside. In my earlier post (linked) I explain why I prefer DIA over SPY options if I want to trade a general market move.
If markets bounce then 357-358 and 360-361 are excellent put entry zones, based on daily chart. Today is an inside bar and markets have stalled for now. I am buying a few puts now if DIA moves below the daily 200ma instead of bouncing up.
Options day trade example. Swing trade entry.When the $DJI was up 200pts this afternoon, I was skeptical it could stay that high so I started looking at DIA. I also have a bearish bias right now on the markets. I prefer options on DIA vs SPY because SPY options are wilder and more volatile. People using gamma and delta strategies make it harder for "simple" long option traders like me. I only trade this index when I have a strong setup.
DIA was around 365 and I saw this as a resistance area. I bought weekly 364 puts for a day trade and as I started creating this chart the index dropped fast. I have exited most of my puts and will close the rest today.
In general, you should have a consistent set of indicators/signs that you use with success. Then you can spot a good setup quickly. The charts show you what I saw. I am leaning bearish on the daily chart, and RSI supports my idea (reversal under 65 after dip below 33.33).
Daily stochastic gave a warning sign (red arrow), so after the strong reversal rally I am looking for price to move below the channel, back to 355. If you use 365 for a swing trade entry and the index continues up to the top of the channel, the stop losses would be between 365.20 and 366, so this is a low-risk options trade.
For today's trade I used the 30m and 5m charts. Many traders (me too) get stuck watching price action and forget to sell at identified targets. 362.80-362.50 was my range to exit puts, and I held some for more downside or to exit green before end of day.
*** As I post this, 363.50 is also a good swing put entry on 30m chart, but I would use a smaller position and hold through price swings.
SHORT $DIA — BEARISH A,B,C,D PATTERN!
I'm expecting a move to the downside to complete this ABCD pattern in $DIA.
The gaps below the market will act as price magnets, and the same measurement from A to B from C would fill the bottom most gap.
I love this setup, and I'm buying puts on various names within the index and broader market to play it.
We could potentially see the pattern continue to the downside, but I am forecasting for a gap fill at minimum.
SHORT $DIA — BEARISH A,B,C,D PATTERN!I'm expecting a move to the downside to complete this ABCD pattern in $DIA.
The gaps below the market will act as price magnets, and the same measurement from A to B from C would fill the bottom most gap.
I love this setup, and I'm buying puts on various names within the index and broader market to play it.
$DIA coming off top of daily broadening formationDIA, along with all indices, are looking like prime short candidates. Most are extended. Combined with fed news, COVID uncertainty, lack of US economic growth, and upcoming rate hikes, it appears this could be the start of some (temporary?) pain.
DIA DailyThe SPDR Dow Jones Industrial Average ETF Trust seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of the Dow Jones Industrial Average. The Dow Jones Industrial Average is composed of 30 blue-chip U.S. stocks. The DJIA is the oldest continuous barometer of the U.S. stock market, and the most widely quoted indicator of U.S. stock market activity. The DJIA is a price weighted index of 30 component common stocks
$DIA year of the DOW?Rotation happening today, tech sector down big, DIA moving up. Will this be the story of the year, flight to Industrials from Tech?
Risk Model for the US Stock MarketThe S&P 500 closed 2021 as the top major stock market index. History suggests 2022 could be another strong year for investors. While it ended the day with a minor loss of 0.3%, the S&P 500 closed the year up just shy of 27%, the NASDAQ rallied 21% in 2021 - overall an outstanding performance of the larger indices.
Our risk model improved over the last 2 weeks in 2021, but key indicators still suggest an elevated risk for momentum swing traders. Some details:
- after the >5% rally in the second half of December, many of the distribution-days over the recent 25 trading period have lost their relevance. The DD-count shows positive.
- number of stocks making new 52w lows is still higher than number of stocks making new 52w highs - alarm signal!
- number of stocks trading below their 200d MA > number of stocks above their 200d MA - alarm signal!
- up/down volumes still below their 50d MA's and below 1 - alarm signal!
- the advance decline line significantly improved over the last two weeks and is now trending upwards. This could be a very promising signal as this is a leading indicator.
- bulls vs bears is a contrarian indicator which also improved over the last to weeks.
Overall, momentum swing traders can be somewhat optimistic going into 2022. For now, risk is still on an elevated level and swing traders should not yet get too aggressive. Take a few smaller pilot positions and if things start working in your own portfolio, start to increase exposure.
