tests and failures

august 2019 is a notable month. My little niece was born and i travelled to USA to be with my sister and her husband and my little niece Anaya!

Also August 14th 2019,I have also tweaked my strategy. The basic reason is that i was entering late. So new strategy is Trading at horizontal lines. I got this idea from reading Naresh Nambisan at this article.

Now is this buying low and selling high? It seems he is just risking a lot by trying to catch falling knives. for example in the “method how and why” on point 4 it surely says “Buy at the top sell at the bottom “. Yes i was not precise in this tag line. I should have been more precise. the paragraph following the tagline says – Buying at the beginning of the trend or thereabout indicates that. So i am changing that to – “Buying in strength and selling in strength” No this is also not precise

So what am i going to do – last few months of observations i have seen – Buying at the demand zone – or where prices have stabilized after a run down or down trend. Selling at supply zone after the prices have stabilized after a run up or up trend.

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big picture  above in the daily chart – a 800 points up swing from august 6th low to Sept 12th high.

Sept 5th was a bench mark candle +135 points shoots up the 50 days SMA (simple moving average). Closes (7874) up almost 100 points above the 50 Days SMA (7783). High of 7904. Then next 3 days goes down 200 points to a low !! again it goes up Hit 8000 and then goes down 200 points to a low in 2 days!

again on Sept 20th a strong red candle 87 points down. Yesterday Sept 23rd 2019 does not even hit 7900

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You can see in the above chart – three times it tested 7900 and it failed down.

9/22 4 pm it tested

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11 4 hours candles or 88 half hour candles and it could not go past 7900.

So short at 7900 for about 150 points profit.

happy trading !

 

 

what a bang to start the 2nd Quarter in the market!

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IBD 50 index  is an index of 50 top performing growth stocks in the world with high spectacular momentum and top line (top 1%) of fundamentals.

As the market is picking up steam growth stocks lead it – and IBD 50 Index has been picking up. it just cleared its 200 days SMA and has been going up steadily last 3 days.

One positive yesterday is the OBV for TQQQ

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Look at the chart below

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the OBV is approaching very close to the the march 2019 high – and this is just 1st day of trading for 2nd quarter of 2019 !

I am long on NQ and TQQQ!

happy trading !

happy traveling also !

 

the stalling action in markets

If we look at the below chart we see the problem in the 2 and 1/2 month rally started in the first half hour on Friday March 22nd 2019., You see with

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the volume for 9:30 am half hour was about 3 times the average 50 Half hours volume.

TQQQ went down by -2.1 % compared to the previous days close !! that is – $ 1.25. i would have saved considerably money if i exited then. But alas, I did not.

Moreover look at the average trading range for 50 half hour periods. It is around 0.61. it lost double that during first half hour! Next on 3/25 Monday the volume grew even more to 5+ million and the price drop was close to 1 dollar!

Now look at the daily chart for TQQQ

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3 fantastic high volume declines in last 4 sessions!!

IBD says this “The market outlook was lowered a notch to uptrend under pressure last Friday, when the Nasdaq composite plunged 2.5% in higher volume. With the market uptrend under pressure, it’s perfectly fine to take some profits in some top performers, especially if a stock has rallied 20% or more after a breakout from a base.”

high volume selling or severe stalling is 6 on NASDAQ and 7 on S&P 500 in the last 25 sessions.

Happy waiting !!

 

 

Past one month Feb 2019

when market is topping and breaks down, then the top sectors and  top stocks begin to breakdown. The small stocks in Russell 2000 breaks down

But as of now this is not the case and it is the 10th week in a row the NASDAQ has gone up.

Russell 2000 just crossed the 200 days SMA. Now all indices are above their 200 days SMA!

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why cutting losses quickly is good

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Delta news letter has some comedy with insight i love.

“Investors just experienced what it is like to be down 20% and then right back up 20%.  It equals a 4% loss.

This is explained by how percentages work.  Percentage down is calculated from a large number (SPX 2,940.91).  Percentage up is calculated from a smaller base (SPX 2,346.58) which means a smaller absolute rise in the market still equals 20%.  For investors to recover all of the losses from the high, their portfolio would have to appreciate by 25% from the low.

The percentage math gets worse as the loss grows.  For example, if a portfolio starts with $100 and loses $50, it is down 50%.  For the portfolio to return to its original $100 amount, it would have to appreciate by 100%.

Percentage math helps explain why losses are so painful and why avoiding major loss should be a top priority in an investment portfolio.  Delta specializes in risk mitigation to avoid major loss.”

pause in the market

In the previous post  i had confidently declared that there would be a 100 + points jump in NASDAQ. The market remains irrational as long as i remain solvent. 🙂

NASDAQ fell yesterday ending an eight trading streak.

So, i cut my looses. Closed Options positions on ANET and TWLO. exited from NQH19. I am still long QLD because the market is still in uptrend. But i reduced my exposure to prevent further losses.  The reason i am long ETF QLD is that, instances of extreme professional selling remain sparse. As the Market Pulse shows, the S&P 500 shows just two days of distribution. And neither down day (Feb. 7, down 0.9% and Feb. 14, off 0.3%) was especially strong. (IBD)

IBD says this “The current stock market rally ran into some resistance Thursday, with the Nasdaq composite sinking 0.4%, back below its 200-day line. The S&P 500 index lost 0.35%, staying above its 200-day line. The S&P 500 index, Nasdaq and Dow Jones, which slid 0.4%, are all struggling around their short-term peaks of Dec. 3. High-level China trade talks resumed Thursday, with more reports of progress. But the current stock market rally has run up for nearly two months, in part on China trade deal hopes. The Nasdaq just ended an eight-session win streak.

It wouldn’t be surprising to see the current stock market rally pause or pull back for more than a couple of days. So watch your overall portfolio exposure. Don’t let double-digit winners turn into losses and be ready to cut losses short.”

Happy trading !

I have started posting on seeking alpha also

here is the article

https://seekingalpha.com/instablog/194086-larrry1/5273849-pause-market

The BEAST has acted (and thus speaks)

  • NASDAQ about to breakout.
  • Conservative estimates 100-200 points imminent in the next few days.
  • UBNT Ubiquiti Networks. TWLO Twilio. TTD The Trade Desk. PAYC Paycom Software, Inc.  Leading growth stocks.

When a Godzilla or KingKong is moving and running, it is common sense not to second guess what you see.

There is a trading maxim i learnt a few years ago – trade what you see and not what you think. at present it looks like its going to take off! 2 days the KingKong the beast called NASDAQ closed above its 200 days Simple Moving average

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you see in the following charts – the first chart is OBV – On balance volume of QLD – DOUBLE NASDAQ 100 ..when on 10/04/2019 it was 53 million shares. Just yesterday we are 12 points below the close on 10/04 and we hit 53 million shares. Accumulation.

Secondly, look at the second chart of NQH19 futures contract. Incredible ascending triangle! Breakout imminent on NASDAQ.

other signs – Both S&P and DOW Jones have easily surpassed the 200 day SMA recently which just acted like token resistances (according to IBD)

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