Once again I’m slightly altering my strategy/process for trading. I like day-trading. I really liked getting in and out within the same day and not having to worry about what’s happening overnight. That said, I’m limited to only a few day-trades per week, and that’s not sustainable if I want to be a consistent trader. So, I’m going to focus solely on swing trading stocks for the foreseeable future. Swing trading is where I had the most success with Forex, there will be less of a chance of me hitting the trading limits, and I won’t have to worry about overnight moves (really — I mean there is pre and post trading, and gaps happen, but it’s lower volume — the market isn’t actually open at the time, so it should be fine), so I think it’s a good idea.
As much as I want them to hold on to their gains, equities just seem to be continuing to drop. Apparently the entire world’s economy is in peril and things are going to be looking bleak for a while, so I should probably just accept the fact that we’re probably going into a fairly bad recession. It shouldn’t matter to me, as a trader anyway, I’m just riding the waves.
The S&P had a nice up-day last Friday, breaking out of some resistance, and then gapped up above that area again yesterday, but ultimately pulled back and stalled around the highs of that range. Today, price is pushing up a little big, and might have some strength — it’s been 45 minutes and there hasn’t been a strong reversal. I’ll try to keep my eye on the S&P throughout the day, to see if things turn around at all (it’s been difficult, as I don’t have another screen, but I’ll figure something out), but
Actually, I need to stop and re-think things. Since I’m swing trading, I need to think about a longer-term view of what may happen in equities. I was going to say that I’m going to look for longs in the meantime, but if I’m going to hold overnight or longer, I need to make sure I think things are truly going to go in that direction. Three’s a little more upside available in this downtrend, so I wouldn’t mind taking a look at longs, if something has been strong, or looks like it’s really poised to breakout. But with the market outlook overall not looking amazing, I might err toward shorts. I’ll come back here with some individual stocks to analyze.
SMCI – Short – This had somewhat of a rounded top over the last few weeks, and this morning it pushed down fairly strongly and broke a couple of support areas. It’s currently stalled at a support area from back in November, and there’s a good amount of room to the next area it could stall at. The main thing giving me pause here is that I don’t see a clear pattern to enter on — at least not on swing-trade intervals. I might be able to find something on a lower time frame, but then I’d be getting back into day-trade territory. I like this still, but I’ll hold off for now and revisit if I don’t see anything else I like
SQ – Short – This has been in a fairly wide range (~$14) over the last couple of months, and today, price appears to be pushing down from near the highs of the range. It’s on it’s second down-day, and is sitting on some support right now (The 4h chart is a bit of a spinning top). The 1hr. Chart and definitely the 15 min. charts are both showing a decent retest, so I think I’ll look to get in if this breaks those lows again. I’m going to run the numbers, add an entry order if the R:R is there, then come back to look at the rest of the stocks
NVDA – Short – In Mid-December, this made a recent high then started to push down. It essentially pushed down for the next couple of weeks, taking out a couple of support areas. It based for a bit (looking at the 4h chart) then made a bit of a spike over the last couple of days. This morning, though, price has appeared to stall at one of the support levels price broke prior (which has now become resistance) and could be heading back to the downside. The most recent candle is up, and looking at the hourly chart, I could see a bear-rally here. I’m not going to run the numbers quite yet, but this might be trade attempt number 2, especially if I don’t see anything else I like
ABBV – Hmm, overall, I was looking at shorts, but I know that I grabbed a couple this morning that looked like they were Long candidates. This might be one of them, but I’m not 100% sure. I could make the case for both directions, though not so much for long today; but that could be due to a move that happened between looking at it initially and now. The most immediate moves would sgges shorting this right now, but it’s been pushing up since October, and really hasn’t established another down-trend, so it’s probably not the best idea. I think I’ll just hold off here
DVN – Short – This is another scenario where price has been ranging for a couple of weeks and as of today is near the highs of the range and appear to be making a push down. I’ll definitely run the numbers here if there’s a good pattern on the 1h chart — I don’t really have to convince myself much of this one, so I’ll just look to trade it. Now I’m just trying to decide if I want to look now or finish my analysis… Hesitation kills, I’ll run numbers and maybe put out another order now. If I do, I think I’m going to call it, as I don’t want to over-extend myself (though, on the other hand, I might find something better than these 2 and want to cancel one of them. We’ll cross bridges)
LVS – Long – This has been pushing up since November and made a decent breakout this morning. Currently on the hourly chart, there’s a bit of a base, so it looks like a great candidate, but how many trades can I realistically put out there? Eventually ThinkorSwim is going to say I don’t have enough buying power for the order, but I like this too (Side note, probably not for the blog but, this is also why I need to get my account balance up, so I can take these multiple shots and not have to worry about it..) In the recent history, looking at the 1h chart, the breakout spikes are followed by long stretches of not much or pullbacks, and there was a breakout spike a couple of hours ago, so I think I’ll hold off. I think I’m talking myself out of it because I already have 2 orders out there, but I do already have 2 orders out there and I am limited by my account size and parameters. I’ll set alerts to let me know if I was on to something, but other than that, I’ll hold off.
I took a glance at the few other stocks I had on my list this morning (NKE, DIS) and while I could make cases for them, similarly to LVS, I don’t want to overextend myself or my account. They might turn out better, they might not. I’ll keep an eye on everything and see how it shakes out over the next couple of days. I might need a better way to sort my options — my screener was sorted by volatility, so I basically went by that. Not to say that’s a bad move, but it’s a constant process of figuring out. Today was decent so far, and if neither trigger, maybe I’ll come back and look for something else near the end of the trading day. Time will tell