Trading radar Oct 11

Good morning.

I hope everyone had a great and relaxing weekend. I am delighted the Detroit Lions got their first win (of many I hope), and they completely destroyed the Rams.

As usual, the ST stream was filled with fantastic trading ideas this weekend. If you are not tuning in, I highly suggest checking out the recommendations and charts - just awesome.

With the holiday and lack of economic news today, not sure we will have a very exciting session. The following stocks are on my radar today:

SOLF
ATPG
WCRX
ISLN
JAZZ

I'll update any stocks with good setups on twitter. Looking for short entries in CL, GC and EUR (6E).

Some notes on trading style

I wanted to write a bit about how and why I post my trades on ST. My style is mostly day-trading and very fast-paced. Most of my my trades are placed using buy/sell stops - I wait for price to come to me. In a fast-moving market - I'll just jump in using market orders.

I might trade several instruments a day - EUR, GBP, CL, GC, TF and stocks. Overall, my strategy is to scalp 10-15 ticks at a time for 1 batch on the futures, and let the rest run. I trade in multiples of 2 contracts - minimum 2, and maximum 10. For stocks - it depends on the range and price of the stock, but the concept is similar. Depending on the market (trending, rangebound, counter-trend) - I am more selective with taking profits and may bail out at certain price levels. If a trade does not go my way after a few bars, I may bail out at break/even or small loss/profit.

Sometimes, I do not have time to post the prices that I am trading, or all my trades for that matter. The point is not to have other people go in at the same time and price as me. If any traders are using my calls to enter long/short the market - then I think it is a big mistake. You don't know what my plan is, or my strategy, or even my timeframe. You could be long based on hourly, and I could be short based on 1 minute, and we could both make money.

I use traders comments as confirmation of my signals - if some of my follows are short, and I get a signal to go short (which I will take regardless), then it is just that extra level of confidence. But if I am going long, and some of my strong follows are short, I am not going to switch just because they are - which actually happened today. I was long EUR and couple of excellent traders were short. I held and it ended up being a great winner.

Early last year, I wrote a post here on not blindly entering trades based on Stocktwits traders. The advice I gave back then still holds - even more so, as there many more traders now on ST, and some are truly fantastic follows. But unless you are paying for a subscription to some of these amazing traders, please use your own analysis and rules to enter and exit the market. Please make sure you have a trading plan. Not mine or anyone else on ST.

Good trading!

Trading radar Oct 4

Good morning! I hope everyone had a great weekend.

Futures a little down this morning. I have a slight bearish bias right now on the S&P. I would not mind a little breather here going into earnings.

Below are stocks on my radar (in addition to the stocks I posted over the weekend):

LONG:
MSCC
ISLN
TTWO

SHORT:
X, MT, STLD (Or any Steel stocks with the worst looking charts)
ATHR
NVDA
AMED
MRVL
XRTX

I'll post any other setups I see during the day on StockTwits. Looking for long opportunities in CL, EUR and GC.

Good luck and good trading.

Do you believe in Divergence?

One of the tools I find to be indispensible on a chart is the MACD. The boring, good old-fashioned MACD with default settings. In addition to its traditional use, the MACD is one of the best tools that can be used to identify divergence patterns with price action.

Divergence is when price makes a new high, but action in MACD is not confirmed - i.e. the MACD makes a lower high than the previous price high.

In the daily chart of SPY, I have highlighted the previous divergences on the chart. New highs in price were not confirmed by new highs in MACD. This can be seen in Divergence 1 and Divergence 4 on the chart. Subsequently, the SPY broke down and we had quite a drop in both instances. On the other hand, when prices made new lows, MACD did not confirm with new lows as can be seen in Divergence 2 and 3. Subsequently, prices went up.

We have what I believe is another such a divergence on the SPY shown by Divergence 5 on the chart. Recent price highs (which happens to be on a strong resistance area by the way), are not being confirmed by a high in MACD. In fact, the MACD is not only declining, but looks ready to cross over below 0.

Now this does not mean that prices will drop for sure, we may just rest here for a while, or make even higher highs. But it does make one be a bit more cautious, even defensive. Raising a bit more cash is not a bad idea, especially with the run we've had in September.

Personally, I always like to have two watchlists to use at any time - a long and a short watchlist. But this week, I will pay extra attention to stocks that are ready to roll over, and I'll be more aggressive with the futures if I see that we are indeed breaking down to lower prices.

Good luck and good trading!

My favorite setups from ST50 for next week

I hope everyone is having a great weekend.

While I like all the stocks in the Stocktwits 50 list, below are a few of my favorite setups - charts and descriptions on Chart.ly:

RVBD
CYT
PANL
ANV
INTU
ISLN

Will post some more charts later tonight and tomorrow.

Have a great weekend!

My favorite setups from

Trading radar Oct 1

Good morning!

I hope everyone had a great September - definitely a nice run. Yesterday, the markets had a 'failed breakout' and reversed hard after a strong open. Not sure if much emphasis can be placed on the action since it was end of month and end of quarter. Nevertheless, I am adding to my short watchlist and turning a it more bearish. Not bearish - the sky is falling bearish, more of a reasonable pullback before the highs are retested.

In any case, up or down, always ready to change my disposition on a dime based on the price action.

The following stocks are on my radar today:

GYMB
CCME
APWR
COGT
GMCR
WCRX


Also looking for pullbacks in CL, EUR and GBP.

Make it a great trading day and month!