The bears den

[DukeCS33]

Given that the technical and fundamental picture is getting increasingly bearish, those who intend to go swing long on any stock need to be particularly selective. In a rising tide, every boat would float but when the tide recedes, the skeleton would show. How does one then screen for strong stocks to trade long? Aside from fundamentals, one would need to look at the demand supply situation at the time when one intends to buy. For me, I tend to avoid buying any stocks that register a high volume count over the last few days at that price level. The general rule I follow is to screen out those which has a higher than average volume at support or demand zone. The rationale is very simple - an increase in volume tells me that the supply is also heavy. For a stock to move up, the supply must be absent or spent. So generally, I tend to favour those stocks that have lower than average volume count in the area where I intend to buy. This is a general rule of thumb and there are exceptions to the rule depending on specific setups.

 

[DukeCS33]

We have a gap that has not been covered from last night. Given that futures are green, there is a good chance that this gap may be covered tonight. I would not be inclined to participate in this move and would await the direction indicated only after the gap has been covered. If for any reason, the gap does not get covered, then I would trade from the short side intraday.

Support is at the 200 day Moving Average as well as the 50 day EMA in the weekly chart. The break of the 200 day MA would be significant for the long term real money accounts. They tend to observe this MA and a real break may prompt further selling.

 

[revhappy]

When I exited stocks in mid of Feb, the total notional was around 200k USD. This means to just get back to that level, I need to sell 7-8 SPY PUTs. I have sold 3 so far. So now I am wondering at what levels should I sell more PUTs. Any suggestions?

 

[DukeCS33]

When I exited stocks in mid of Feb, the total notional was around 200k USD. This means to just get back to that level, I need to sell 7-8 SPY PUTs. I have sold 3 so far. So now I am wondering at what levels should I sell more PUTs. Any suggestions?

If your intention is to scale back in, then it make sense to sell at the major support levels to the downside from here.... 2722 / 2681 / 2583 / 2346.

However, if you would like to collect premium and avoid getting exercised, then selling below last year's lows would make sense.

There are also other parameters that you may like to consider aside from levels... what is the vol that you should be selling at (and where is it relative to historical vols) what is the tenor that you are selling as the tenor and level would imply the delta or the probability that it may be exercised on you.

 

[revhappy]

If your intention is to scale back in, then it make sense to sell at the major support levels to the downside from here.... 2722 / 2681 / 2583 / 2346.

However, if you would like to collect premium and avoid getting exercised, then selling below last year's lows would make sense.

There are also other parameters that you may like to consider aside from levels... what is the vol that you should be selling at (and where is it relative to historical vols) what is the tenor that you are selling as the tenor and level would imply the delta or the probability that it may be exercised on you.

Thanks! 10 char.

 

[theMKR]

spy flying up all the way

 

[Trader11]

Thanks! 10 char.

You not selling naked options right?

 

[coolhead]

something's got to give, it can't be at +0.4 to +0.5% range forever.

 

[Trader11]

spy flying up all the way

Looks like accumulation stage has began

 

[tsipacse]

S&P500 previous week’s candle is an inside week. If S&P500 is able to regain 2805 levels by tomorrow (friday close) which means a failed break-down, i think it would be a good reversal indication. I am hoping for this scenario...

In the absence of any Sino-US war of words, the equity market would take its cue from the UST market and economic data release. The bond market is flashing signs of recessions and increasing probability of a Fed cut. The Fed has indicated that they would stay on hold and as such, if we have data that disappoints, this scenario would increasingly be baked in to the point that the Fed cannot ignore.

Things cannot go up or down in a linear fashion just as the world is dynamic and not given to forecast. For now, the Bears have the upper hand, having broken below key support of 2800 in the S&P. I would think that this 2800 level would be tested a few times before the next wave of selling may happen. 2767 is the 50 day MA in the weekly chart and remains a key level from here... no coincidence that this level arrested the downside in last night's trading.

For me, I would be looking for good technical setups to establish fresh shorts. This can be difficult for me as I am not given to breakout plays, preferring always to trade retracements..... my stock scanners are not showing much swing short patterns either.... maybe it is time to readjust my trading style as time and tide waits for no man and the opportunity may well be gone by the time I gain comfort in playing breakouts.

Happy to hear ideas.... I would particularly value alternative or bullish views.

 

[theMKR]

wah 2799!!

almost break 2800 sia

 

[revhappy]

Dow Jones in the red!

 

[revhappy]

Looks like the plunge protection team is working hard to prevent SP500 from going negative.

 

[DukeCS33]

Looks like the plunge protection team is working hard to prevent SP500 from going negative.

US has not the same type of plunge protection team like China has. The Chinese can intervene directly in good size to support the whole market. US's best effort is to use jawboning. In any case, the gap got covered and thereafter we see the market's inclination.

 

[theMKR]

today is seesaw again

 

[SBC]

today is seesaw again

But the swing is not fierce enough. Exciting to have swing of 300 on DJ

 

[theMKR]

But the swing is not fierce enough. Exciting to have swing of 300 on DJ

wah i tot i am the only one still active at this time lol

 

[SBC]

Good swing on gold 2nite. Trying to place few orders b4 sleeping.

 

[theMKR]

too bad i dun trade spy, else can trade like crazy

 

[DukeCS33]

We have yet to see any retaliation from the Chinese other than lambasting and threats via official newspapers. This represents a very measured and controlled response and there may still be hope for trade talks to resume. Any confirmation that we may have of a G20 sideline talk between Trump and Xi may be taken positively by the Markets and prompt a rally.... however, the clock is ticking away and this needs to be confirmed before the imposition of the additional US tariffs.