Trade Aptitude
Results of Friday's Best S&P Turning Points: The buy @ 3937.00 filled minutes before the session ended and only bounced for 5.25 points.
Today’s Best S&P Turning Points (consider wider stops and less size in fast moving markets):
Short 4002.25 stop 4006.50. Buy 3922.50 stop 3917.75.
Globex View: Trending up.
The World Sentiment Index: (+100/-100) PLUMMETS from +50 to -36 with most major world markets bearish. Historically price will close above the open 56% of the time.
Catalysts: Nothing on the economic calendar. Waiting on CPI & FOMC tomorrow and Wednesday.
Quick Tip: Everyone is a Day Trader
If you’re a position trader, buying and holding for months, maybe years, you’ll likely disagree with that statement. Even swing traders will disagree. But think of it this way, regardless of your holding period, you are buying and selling your position during the day session. For a minute or two, you’re day trading.
Why is this important? Because assets can move around a whole lot on certain days and that means when during the day you buy or sell can make a significant difference in your return.
Here’s an example: Let’s say you like NFLX for the long term. The Average Day Range % (how much NFLX can move in a day not counting gaps) is 3.4%. TSLA is 4.6%. NVDA is 3.9%. Timing your entry and exit intraday can be important when you consider how much an asset moves.
This week has a raft of market moving news. CPI on Tuesday, FOMC on Wednesday, Jobless Claims & MFG indexes on Thursday, PMI on Friday. These are all days when you could see wild swings in value given the nervousness in the market now.
Knowing the ADR% of your hot list of candidates for buying, or current positions for selling, will help. Considering the NFLX example, buying when it’s down 3% or so makes sense. Selling when it’s up 3% or so does too.
The formula for ADR% is simple. Average (Range, 14 days)/price. Your trading platform may even have this available. If not, use Average True Range% (which includes gaps) to get reasonably close for day session range purposes.
Trade Fearlessly,
Mike Siewruk
P.S. Feel free to share this blog with all your trading buddies.