Technical Analysis of S&P 500 Index SPY

I drew up some internal lines on SPY and you can see we are clearly in an uptrend now off the confirmation of the early October levels being busted through. The only thing to watch now is how the uptrend channel holds up. I have to assume it is going to keep ripping through the yellow levels as long as trend support is held.

Watches for Thursday

My top long bias watches are GOVX AMPX USEA PRTY. Top short bias watches SLS EPIX KULR ARDX SST DCFC PEGY AZUL SAN

Daily Evaluation

I had a really good scalp on BABA in the morning and should have switched to long setups off my long watchlist but I took a few too many trades on BABA and gave some back. I juggled some longer-term positions and did some more IWM. I need to not expect to get multiple good trades off the same ticker each day. If I had just stopped scalping BABA I would have had a better day. I missed one of my long watches SLS because I was looking at other stuff.

Daily Evaluations 10/21

Friday the 21st was ok as far as my executing. I mostly just scalped and traded IWM. When it's readable I trade it well especially off support and resistance lines that have held. I've noticed that lately it is respecting major levels. Probably because everything is so choppy now. I still am preparing myself to see weeks of range-bound action as this oversold suppport level is worked out. As of today the stock market is literally the same as it was Sept. 22 a month ago. I've seen ranges like this years ago where it trades up and down in a channel for weeks. I come everyday prepared for a green market day or a red one with my watchlists full for shorts and long setups. 52 week lows, supernova shorts, and channel breakdowns are my go-to for shorts. Multi-day breakout and any flags or sideways or triangle consolidation breaks are my go-to longs. Sometimes oversold bounces. HBLZ is a good one now.

Today I made some great trades scalping BABA in the A.M. and some good reads on IWM but I gave gains back overtrading IWM. My winrate is actually increasing on IWM but I need to not push my luck as it gets farther into the day because it literally always get super choppy in mid afternoon. My plan going forward and it worked today is to trade regular stocks from 9:30am to 9:45ish then look at IWM and index ETFs. I have been doing XHB and NAIL a lot too. My selectivity wasn't awful today but wasn't quite good enough possibly because I wasn't rested. I have overtraded the most when I'm the most tired. Trade management was good, risk management was ok. My thinking going forward is to keep multi-day option trades on at all times like USO or natural gas or GLD GDX so I can get a cushion on gains so I'm not forcing trades during regular session. I like to look at my IWM charts at the end of the day. Almost always the first direction it breaksout to in the first 15 minutes is the fakeout then the real moves are the opposite direction. Today it popped out of that range and looked bullish then spike topped again and crashed. So choppy until even after 10:30am. I need to work on selectivity, fine tuning risk management with entries.

Earnings Coming Up

IWM Patterns

I traded well today and had kind of a normal green day. IWM was easy to read with support and trend lines. It held a major support I drew up 3 times. I looked over a couple weeks of the IWM chart from 9:30 to 9:40 or 9:45 and during this time way more than half the time whatever direction it trends right at 9:40 or 9:45ish it will reverse and that will be the days trend direction. Defintely and repeated pattern here. It can also be very very choppy the first 10 minutes of trading. I decided to just miss the open and didn't start until around 10 today. I plan to just not trade IWM at open going forward to avoid likely bad reads. I am learning to just avoid it when it is choppy. It likes to slow down in the afternoon and almost always has an hour or so of tight range fakeout hell. Sometimes the ranges are tradable but I haven't mastered that yet. It almost always lately has an explosion move the last 30 minutes to close. It will just move fast and straight. When the candles get long and the algo dance isn't going on I can scalp good gains with size.

I'm going to start journaling win rates on different setups it does. I will call one power momo because it just speeds up and goes fast and straight for minutes at a time. This gives the long candles. I'm focusing on setups with the highest overall dollar profit average per trade to get some good days going. Some of the setups I've been taking have high win rate but not high dollar amount. So I think that is why I'm spinning my wheels some weeks. High short interest longs is one of the setups and I think it may be coming back if indexes hold support. Best profit setup is IWM options multi-day. Not a high sample though. Puts on stock bear flags, USO options multi-day, BABA intraday or overnight, and short intra-day overbought are the top setups profit wise. I have been focusing on IWM intraday and 52 week breakdowns because its safe with market direction indecision with some of them but I haven't gotten big size on them. So many days I am just amazed at how well IWM trades with technicals. I always figured with the HFT and computers it was hard to trade. In some ways it is because of how it jumps up and down like Pac-Man eating up orders but it respects the lines. I guess that's the way the programs are setup. Downtrend break on gold and miners.

Two Day Evaluation

Looked at my overall win rate on IWM intraday and decided to back off trading it today. It hasn't been working this week. I have been trying to force trades to get a big green day. I decided to focus on intraday overbought for shorts because it's a high winrate and I can get good entries and that worked for me though I didn't have ideal size on it. I am having a hard time balancing size with risk and the ability to get a good sized gain. It's either too much risk or not enough risk so not a big gain. I am not sure my expectations on what I can do with an account my size are super realistic. I need perfect entries to put on the kind of size I want. All I need to do in my swing account is trade USO options and hold for 1 to 2 days and I have a 70% win rate but I have been doing stock options too and those aren't working out right now. I am going to regroup that account and keep going daytrading but I'm thinking for my stress level it is best to work a part-time job so I can do what I need to do slowly on the daytrading account. I usually only see a couple choice setups all day on the stocks I trade and it's not enough to have to rely on those for big gainers. Risk management was back today until later in the day I forced some size on scalps. I think I need a break to clear my mind.

Crazy IWM Day

Today was one of those days I should have just walked away in the morning. I was down for awhile and never got any good setups on for awhile. I get really determined to come back and took way to many mediocre trades and had a bad red day. It can be overcome but I need to get better at just taking a break if there isn't a clear direction on stocks or IWM. This was one of the choppiest days I've seen in awhile. Huge gap up run and then down and then back. I wasn't reading IWM well and was doing horizontal trend lines. I have success with it with just regular trend lines. The horizontal gave me some bad ideas in the afternoon to long at resistance when I saw a triangle. Bad risk management today and selectivity. We might go into a range here on major indexes. Any rally might take awhile based on todays lack of direction. I traded USO a lot too and caught some good moves on it but IWM was the downfall. I can see good moves coming when the candles get longer and price moves faster. It's getting easier to spot those. USO moved a lot smoother many times. Looking at how I was looking at IWM I was on the right track in the morning but right at noon the chart almost became unreadable and untradable. Should have just switched to stocks or walked away or even USO might have been better. USO was tough in the afternoon too.

Failed Signal Breakdown

The reversal off the lows on the epic Thursday spike has set in motion a strong bear rally. I believe this will continue a bit. Its similar to the failed signal in 2008. The only way to know if it follows through for a long-term low is to see what the FED does. There is actually another big trap reversal today as the reversal red day is now getting wiped out.

Another Green Day

I traded well today despite some mistake reads on IWM. Traded IMUX short side. I was all over USO all day and could have gone more aggressive on the spike down in the afternoon. It was serious momo. I went over the Friday trades and it was another good day for me. IWM has provided a lot of volatility and easy trendline reads. I have a good sample size on the 52 week breakdown stocks I have been trading. Winrate is around 48% about 2% average gain, 2% avg loss. I like the winrate and can work with it. Since some of these stocks don't have a ton of day range it's going to be a task to capture as much of the moves as possible but there is a lot to work with as there are so many tickers like this now near lows. I am aiming at ones with higher day range. I realized I need to keep the stops tight with 2% gains. I sometimes swing them overnight super reduced size. I think it's a good idea to do that only on onees that have a gap down history. Otherwise I'm taking on risk. REV was one I shorted the other day literally the day before the big spike. These ones are some of the biggest gainers off lows too like AVCT today and others last week.

Bonds and Stocks

I think it is hard to say bonds will outperform stocks in recessions going forward. 2020 was a year we saw the stock market fall and bonds.

Charts of IWM 10/14

I had one of my best green days in weeks today thanks to IWM. Today was one of those days it was moving and easy to read. I got chopped up the first 10 minutes or so at open and decided to just wait to see it develop. When it started moving fast with a long candle on that spike top after open I instinctively shorted and it provided many opportunities throughout the day. I even traded some of the tight channel the last hour of trading and nailed the short into close.