Month: September 2021

Nothing can test a trader’s patience quite like a choppy market.

When markets are rallying or fading there is action, momentum, and what often feels like a lot of opportunity for profitable trades. Where a trader’s patience and fortitude can be tested is when the market finds itself trapped in a tight range for days on end.

This is what we’ve seen in the market this week.

To sit and stare at the charts during a chop fest is an exercise in frustration and one that is likely to rob you of your peace of mind. So what’s our suggestion for handling emotions when the markets are stuck?

Set alerts and walk away!

Chart alerts can be one of your best friends as they can keep an eye on the market for you. When things are range-bound, we like to set alerts at key points both above and below the current price and simply walk away… letting the alerts work.

The beauty in this is that if the market happens to make a meaningful move, you will be alerted. If instead the chop fest continues and nothing of substance happens, your alerts will not get triggered and you will know that nothing meaningful is taking place while you’re away from the charts.

For example, look at the Nasdaq (NQ) chart this week (shown below). We had alerts at levels above and below its recent range and none of those alerts were triggered. Instead of watching every minute of price action and pulling out our hair, we let the alerts work and were able to detach ourselves from the chart knowing nothing was “changing.”

 

 

Letting the choppiness of the market steal your peace of mind can lead to unwarranted exits, overtrading, and unnecessary anxiety. Let the alerts do the work for you and don’t be a victim of the chop. More often than not, the chop is just “algorithm-driven” noise designed to shake you out of good-looking positions.

In this Sunday’s video, we’ll cover a few of our favorite setups that should be poised to make solid moves once the chop fest ends. We’ll talk to you on Sunday! 

Stay Focused!

 

 

Last week we saw the market mostly chop around and this week the selling began. It’s important to anticipate when the market will drop so we can position ourselves wisely. The first step to understanding when the market will make big moves is being educated and aware of the economic events that will occur throughout your entire trading career.

This week, specifically on Thursday, Sept. 9, the SPX (Equity Index) roll began and will continue until next Friday, Sept. 17. It’s important to understand what these events are, when they occur, how they affect the market, and how we can prepare to trade them. 

Every quarter big money takes time to lower the market, sell positions, and roll out into further expirations. What this means is that big money is getting ready and positioning for the next quarter, which is ultimately what is sending the market lower this week. 

We can expect more volatility these next two weeks as quarterly futures contracts expire and big money managers roll over their positions. The ES (S&P 500) has experienced a healthy pullback over the last few days with a reversion to the mean. We plan to continue to buy the dip and drive the market higher following the rollover.

Watch the video above to review current stocks we’re watching such as GOOGL, ROKU, and TSLA. Remember to familiarize yourself with events that move the market every week, month, and quarter. Be patient, and let’s finish the week strong. 

Stay Focused!

 

 

Let’s walk through how to build a watchlist not just for individual stocks but for particular sectors.

While we primarily like to base our scans on the squeeze setup, there are many good looking trends in sector groups that could be overlooked due to focus on the well-known tickers like TSLA, GOOGL, and FB.

The financial and communication sectors are groups that have shown strong trends and daily squeezes that offered us great setups in the Compounding Growth Mastery. In the next few weeks, we’ll be focusing on sectors that are setting up in the buy zone and could provide a nice set of opportunities.

Watch the video above to review the individual sectors and learn how to build a watchlist for high-probability setups. 

Enjoy the rest of your holiday weekend!

Stay Focused!

 

The trend is your friend… you just need to know how to find it!

As traders, it is easy enough to fall in love with certain stocks as the years go by. The danger of this is that our favorite stocks and sectors aren’t always going to be “in play.”

For example, technology has been one of our favorite sectors to trade this year; however, we only enjoy trading technology when it is setting up for our ideal entry. Rather than force the trade and break our rules, our mindset is to trade anything that fits our criteria and ignore anything that doesn’t.

While technology has offered many profitable opportunities for us over the last few weeks, we’re heading into the weekend with the group too extended for us to take new entries (chart below). While we wait patiently for a pullback in technology there are a few other trending sectors setting up at the buy zone right now.

 

 

One of our favorite sectors is healthcare — XLV. This has one of the better trends in the market and we took an entry this week in the Compounding Growth Mastery as it pulled back to the 21 exponential moving average (EMA) with a brand new daily squeeze. Charts within the group such as UNH, LLY, and others are setting up nicely here and could provide a nice set of opportunities over the next few weeks. 

 

 

Another favorite of ours is the financials — XLF. This is an example of another great trend finally presenting a fresh daily squeeze at the 21 EMA. We’ll be keeping an eye on setups on GS, JPM, and MS for entry opportunities in the weeks to come.

 

 

In this Sunday’s video, we will walk through our process of identifying the best sectors and trends to swing trade. Just as important we’ll show how to find the best setups within each sector. Trend, structure, and momentum are the only things we want to focus on as traders. Once you know how to consistently find the best combination of “the “big three” —  trend, structure, momentum — the game gets a whole lot easier.

We’ll see you in Sunday’s video!

Stay Focused!