Coming in on a Wing and a Prayer

CandleChart_line_graphA 1943 hit song “Coming in on a Wing and a Prayer” depicted the story of a bomber pilot fighting to bring his “shot-up” plane back to base.  Although many don’t get the allusion and confuse the title by adding “a whim and a prayer”, myself included.  As it was brought to my attention whimsicality and fervent prayerfulness don’t go together, which is exactly my point for using it. Unless your prayer is for the current atmosphere of whimsical complacency to continue unabated something’s going to give.  It has to.

Tuesday’s trade was a classic “status quo” type day.  From the opening, traders came in as buyers pushing the NDX and RUT to new highs, (recovery for the NDX and new all time for the RUT.)  Earnings season jumped into full swing on Tuesday as well and the early hype was for IBM to finally join the pack and “blow the doors off”.  That may have been the initial reaction, but it was very short lived with the balance of the earnings call from IBM focusing on the sales decline putting the kibosh on hardware revenue and the rally.  As of 5:15 EDT IBM traded as high as $193.77 before sliding to a low at $180.50. 

The NDX is back at “don’t panic it’s only a number” levels where you have to wonder who is jumping in at new recovery highs on the eve of entering full steam into earnings season to buy now, those that believe in the status quo of course.  Also, those that PCLN, which cruised up 2.37% or $28 to $1205.95 and GOOG up 1.14% or $13.70 to $1163.70, will continue to blow the doors off of earnings.  A feat that should be harder to reach as price expectations outpaces reality.  Remember you can only defy gravity for so long.   As I went over the titans for signs of more weakness than strength the only stand out was NFLX, which continues to rise and fall as quickly as the ‘Big Dipper’ rollercoaster.  Check today’s chart to see NFLX through the eye of the Eagle.  Take heed though that NFLX may not be suitable for everyone.  The bid/ask spread has widened considerably which presents a situation where you’ll likely need to widen stop levels to prevent getting taken out more quickly.  This adds additional risk to the trade and that is where the decision to trade the stock comes in.  Should the allure to trade NFLX overwhelm be prepared to “take some heat” on the trade. 

Check out today’s charts for additional detail on the Eagle’s quick eye catching the moves in NFLX, IBM, and AAPL.

 1-21-2014 3-05-31 PM_NFLX

 1-21-2014 3-57-32 PM_IBM

 1-21-2014 4-22-09 PM_AAPL 

Join me Monday thru Friday from 9:30 AM to 10:30 AM EST as I continue to review trading equities using DTS.  The room is open to all and is a great place to review how the DTS birds are easy to use and will make consistent trading profits. 

The good news is that the current atmosphere remains prime for day trading.  And while the $264 billion trade remains elusive there are solid opportunities to trade profitably.  I expect there will be numerous opportunities from a growing list for both traders who approach the market from a bullish prospective as well as traders who approach the market from a bearish prospective.  

Remember the key is being able to reduce and separate the “noise” from opportunity.  This takes knowing and executing a well-defined strategy and allows you to see opportunities amongst the “chaos” and by trusting the mechanics of your strategy, be able to take advantage of them. 

The trading opportunities should remain abundant within equities, futures, ETFs, options, treasuries, and precious metals.  Opportunity continues to knock on our doors.  While it doesn’t come without risk, risk can be defined and more manageable.  Volatility and broad moves are exactly what a day trader desires and being able to respond without questioning is a luxury many are unaware of. 

Using the Hawk Micro Scalper, Falcon Swing Trader, and the Eagle Trend Trader within the various markets can produce strong results.  The combination of any of the “birds”, the Hawk, Falcon, or Eagle platforms with Trade Manager provides a solid, more stress free way to building profitable trades. 

opportunityIndicator Warehouse

 

Indicator Warehouse has in my opinion the best platforms available covering a wide range of traders from novice to expert.

 

The Diversified Trading System from Indicator Warehouse offers cost effective products that allow a trader to enter into the “chaos” and trade more effectively.  

 

Trade Manager from Indicator Warehouse automatically calculates the correct amount of contracts or shares based on your account size or market volatility.  Automated stop-loss management and position sizing eliminates most of the problems most individual traders have.  Day trading and position trading both require (actually demand) good risk management.  Trade Manager does the job across the board and is an essential trading tool that ensures that you take the maximum profit from all your trades. 

 

Profit Finder – System Back Tester.   When implemented it allows the user to:

  • Immediately know the impact of parameter changes. 
  • Automatically reads all of your DTS entries and exits
  • Calculates the profit/loss of each trade
  • Performs a wide number of essential intelligence boosting calculations instantly
  • Provides solid details about the effectiveness of your trading strategy/ methodology/ indicators

 

 

My point on money rotation and sector rotation is similar to that on parabolic moves that they happen with frequency within many time frames.  As traders these types of moves can be a bonus for day trading or position trading so again don’t get caught up in the “what’s the catch.”    Realizing a rotation is occurring within a stock you trade or a sector is a great source of stocks to plug into the Diversified Trading System.  Allowing DTS to cleanly and beautifully capture the moves though any or all three DTS trading platforms.  Our goal remains to assist traders to make greater profits during all types of markets.  Sector and money rotation is another tool.

 

The Diversified Trading System used together with Trade Manager should continue to produce numerous trading signals in the DJIA, YM (mini), S&P 500, ES (mini), RUT, TF (Russell 2000 mini), AAPL, AMZN, GOOG, NFLX, and LNKD, GS, and Tesla Motors (TSLA).    In the near future I will be adding options strategies to the trading list. 

 

Here is a list of the markets where I have found that DTS (all three birds) are producing numerous signals.  Continue to bear in mind that there are days when trading opportunities are not as plentiful.  These are days when not trading is likely more profitable than attempting to “force” a trade”:

 

  • DJIA future (e-mini available) – highly recommended for experienced traders
  • S&P-500 future (e-mini available) – highly recommended large intraday moves. The SPY options are a valuable alternative to the future.
  • Russell 2000 future (e-mini available) – highly recommended can lead in either direction.
  • NASDAQ 100 future (e-mini available) very highly recommended and dominated by AAPL, AMZN, NFLX, GOOG, and TSLA – will likely continue to have higher percentage moves as the next larger degree decline begins in the NASDAQ first.
  • GS (Goldman Sachs) – good two way volume – usually has $3+ intraday range – Options available
  • AAPL (Apple Computer) – highly recommended – Options trading as well
  • GOOG (Google) – highly recommended – larger accounts needed – options traded
  • LNKD (LinkedIn) – solid intraday range and has picked up recently Options traded
  • NFLX (Netflix) – solid intraday range – volatility has deflated on the rise back to $300 – Options traded and very liquid
  • TSLA (Tesla Motors) – highly recommended  – patience is required if you trade the options – trading the stock remains solid
  • TWTR (Twitter) – both stock and options strategies available.
  • 30-yr Treasury Bond future – highly recommended
  • 10-yr Treasury Note future – solid two way trade
  • TLT (Treasury Bond Long ETF) – very active – options as well
  • TBT (Treasury Bond Short ETF) – very active (moves inversely to TLT) – options as well
  • Gold (futures and ETF – GLD) very active – not suitable for all traders
  • Silver (futures and ETF – SLV) – very active – not suitable for all traders
  • GDX (Gold Miners ETF) – lower priced – suitable for all traders
  • ABX (Barrick Gold) – Large rally potential – capable of sizeable intraday moves.
  • NEM (Newmont Mining) superb volatility produces opportunity laden intraday moves.
  • EURO FX (futures, mini and micro contracts available) very active suitable for all account sizes – Highly recommended
  • Natural Gas (futures) – can be active and volatile
  • VIX Index (futures) – not suitable for all traders, more experienced traders should find a growing two-way trade.

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