Sunday, August 16, 2015

$DJX Is Down 2% YTD

My Performance Last Week


Last week I was stopped out of 2 option positions. One was a credit spread on $CELG and other one was a debit spread on $SBUX. I took the time this weekend to do a post mortem on these trades.  I selected the right stocks and the right option strategy but the market turned negative within a few days of placing my trades which led to me getting stopped out.

Reviewing the performance of the three major indices that I track ($DJX, $SPY, $QQQ) one thing jumped out. $DJX is down -2% year to date and currently is trading below the 200 daily moving average, which is what institutions prefer to trade off of.  $SPY and $QQQ are hovering over the 50 dma.  These are bad signs in the market! 

Being stopped out of my positions on $SBUX and $CELG was something I had planned for in case the market turned against me. It helped me conserve my trading capital. These stocks are still fundamentally and technically sound.


My Market Outlook


August is typically a bad month for stocks. However, last year at this time, the market took a turn to the positive and shot up 5% in the last two weeks.  I am fearful of the market but I am using it to my advantage by scrutinizing the charts. I just step back when I am fearful and look at what the story the data tells me. Charts reflect the price and volume and the strength of the stock, but they also represent human behavior.  There is always going to be noise and chatter from the media but I prefer to verify what I hear by looking over the charts and doing my own due diligence.



Survival Of The Fittest

For access to my primary watch list and virtual trade plans this week, you need to subscribe to my service, however, here is my secondary watch list

$EA
$MO
$RAI
$LMT
$EBAY
$AMZN
$DHI
$V
$CMG
$EQIX
$STZ

One thing we have seen in the market lately is that we have a 3 digit swings up and down in the indices. I prefer to wait until later in the morning after things have subsided before I place my trades. I don't ever chase the trade either. It is better to wait and just let the price retrace to the target price identified on the plan.

Happy trading!













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