Slope of Hope Blog Posts
Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.
I hope everyone is enjoying the weekend. It is beautiful here in SoCal and I will be a beach rat this weekend. Last week my trades worked out just fine with two frustrating stop outs at break even that eventually climbed right back up,and one beautiful day trade before earnings (AMZN, DO, and QCOM respectively). My other trades are still active or were weekly spreads that expired.
Energy has been a beast, and we may get some rest next week ( I wonder what it is sniffing out; war or QE?) The currency metals are simply not wanting to go down anymore, but I am still mostly writing spreads and day trading GLD with weekly calls and puts.
I am also still short FAS and SPY, although I took off half of SPY on Friday's close. FAS broke its bear flag channel, and I am expecting FAS to be in the 60's soon enough. I also am going to short PNRA and CMG on all rips when stochs go OB. Higher energy, higher food, higher taxes, and zero wage growth is a recipe for disaster for these companies. Grocery stores are dying and people need that stuff, wait until these restaurants try to pass these higher costs along. Below is my current active trades, and Y_T_D results, and some charts to enjoy.
Without a concerted strengthening in the Financials/Banks, it will be difficult for the Major Indices to continue to garner a meaningful rally, particularly in view of the comments I made in my post of July 19th.
The Daily charts below show market action, so far, as I write this mid-day on Friday…not an impressive or supportive showing in the Financials Sector and Banks.
Intraday volatility is building slightly in the VIX, as well, as the SPX:VIX ratio pair trades under 82.50 at the moment.
Once the market opens each day, it can be rather difficult to surmise which direction it will go by the end of the day. For some it seems like a a random walk in the park. But for me, as a trader, there have been countless observations that I've made from over the years about what is seen in the early morning action and what it means for the rest of the day.
I'm going to be doing a 5-part series on understanding the early morning action and how you should be positioning yourself for trading the rest of the day. Today, I'm going to start off by talking about gap-downs.
As I lay out the 5 different scenarios (no way is the market limited to just these 5, but they tend to be the most common ones), I'm not saying that every time you see something play out early on, as I've noted, that in the end the result will be exactly as I say. Instead, you should look at in a way that says "the conditions are favorable that…."
So let's examine today's market condition example and what you can expect from it.