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“The market is made up of people, and to beat it you have to know them as well as you do the thing you’re considering investing in”

~Howard Marks

One of the focal points of my NYC Investor Conference was to throw away all the book you’ve read about technical analysis. All they’ve been good for is programming droves of traders that all think and behave in the same way.

Think about that for a minute.

What is working more and more these days is to understand a “playbook” way to approach trading a stock. Bounce off a moving average? Support/Resistance? Head and shoulders? The list goes on and on.

If you are like me and have watched these things continually fail for the last few years, it is because the machines have now become smarter than you, and you are becoming an easier target to prey upon.

How do you think I was able to navigate nearly every single days outcome in the month of September? Have you seen a scarier or more complex environment? Yet, we managed every price swing and thought process like it was nothing.

If you are relatively new to the market you are unwashed. There is no finer environment to study than in the last 5 years. It encompasses it all.

If you are struggling, it is time to unlearn the ways of the old. I think we have the optimal playbook for increasing your success at this game.

If you haven’t join me in After Hours with Option Addict (extra soft sell).

OA

THEREIN LIES CONVICTION

For the last year or more, we’ve analyzed the “conviction meets conviction” movement in the Russell 2000.

Each time the Russell has traded into a conviction days range, it is met with a conviction day in response. We traded into the conviction day of 10/15, we got a conviction move in response.

2015-10-28_11-51-02

This is a market still controlled by buyers, and will be for the foreseeable future.

Here is the last year plus of conviction movement in the $IWM. Leaving this zone with conviction is an important move to the analogue we’ve been running.

OA

BANDS A MAKE HER DANCE

Not a big fan of Bollinger Bands, but I used them as a metric of “speed” in my NYC presentation.

I like them for the pinch factor, nothing else.

Take a look at the weekly and monthly charts, and how narrow these bands are to support my melt-up call from long, long ago.

Pretty tight, no?

Picture2

Picture1

 

 

THE TROLL SHORT WINS AGAIN

Please don’t get this twisted. Shorts have been very much right on direction. However, the TROLLING element is what I wanted to draw your attention to here.

With any instrument, once the tone comes through the way it has the last few days, that is a sign to get out of harms way. They sense you there, and the pain trade is clear as day.

Thanks for the social experiment everyone.

OA

OA BUY AND TUCK: $AMBA

I bought a block of $AMBA this morning. By tuck, I am putting this away for a bit. A buy and forget position.

Will look to make an add if this trades lower.

Also picked up $NK just over $11.

More later,

OA

GAME PLAN FOR TOMORROW

Looks like another quarter of sitting in this shitbox stock named $TWTR. The $AAPL calls might exhale a bit, but I’m guessing it catches a bid off the open.

I’ve got two plays I am going after tomorrow: $NK and $AMBA. Both I will play via stock, and $AMBA for longer term.

I am in dire need of a watchlist makeover. I’ll have a few more set-ups for tomorrow’s After Hours with Option Addict and hopefully a “Trade of the Week” for tomorrows session.

See you in the AM.

OA

GUN TO THE HEAD

If you had to decide, Apple or Twitter into earnings tonight?

I’m finding very little here to discuss otherwise.

OA

TROLLING FOR OIL

Just an observation, as I am not overly concerned with who owns what, but I have noticed in the last few days that many have taken to the keyboard to attack the idea of higher oil.

Oil prices in the high 40’s, nobody cared. Oil prices down 10 of the last 13 days, its getting louder the lower it goes.

Again, I won’t debate all the things you’ve read about oil and where it is going. I prefer just to sit back an monitor sentiment and behavior.

This chart illustrates a relatively thin profile below. We’re on the edge right here. Naturally, a fine place to ramp up the discussions of how low oil will fall.

2015-10-27_9-42-27

 

OA BUY: $IWM

I haven’t bought $IWM calls since I was in high school. But I did here, because I feel its my duty.

2015-10-27_8-36-48

They might try to probe the lower end of this range a bit to lure in some shorts first. If we end the day here or above, might be a decent location for a November play.

More later,

OA

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