SPY Thoughts July 24

**These are my thoughts on the SPY ETF in my Daily Trade Ideas which includes many, many more charts and setups.  Subscribe to my nightly Daily Trade Ideas on the right to see the rest of this letter.**

“Once we realize that imperfect understanding is the human condition there is no shame in being wrong, only in failing to correct our mistakes” – George Soros

Another classic summer day that was marred by slow action.
There are some more large fast moving leading stocks reporting Thursday like BIDU SBUX CELG AMZN and more so we could see some action there but I will be away.

I’ll be traveling Thursday and away until late Monday so there will be no reports again until Tuesday the 29th.

I don’t think I’ll miss too much even with lots of companies reporting earnings.

Let’s look at some charts.

SPY July 24, 2014SPY is trying to go but sin’t getting far.

I don’t expect it to move much higher until the Russell 2000 perks up some more with the IWM move back above 116.

It remains the summer to be in cash.

Have a great evening and weekend .

I’ll be back to normal next Tuesday in terms of reports and updates.

Warren

Better Action But Still Slow Summer Trading

**These are my thoughts on the SPY ETF in my Daily Trade Ideas which includes many, many more charts and setups.  Subscribe to my nightly Daily Trade Ideas on the right to see the rest of this letter.**

“The best traders have no ego. You have to swallow your pride and get out of the losses.” – Tom Baldwin

Much better action than we seen for a long time today with stocks acting good, especially those who broke out.

We’ve seen so many breakout failures and poor action lately but this Tuesday saw that change, at least for a while.

It doesn’t mean we are out of the woods, but it does mean I am not 100% cash anymore.

I’m still using relatively small positions, just dipping my toes in the water but so far the water feels good and safer.

Things did slow in the afternoon a bit but all in all it was a much better day than we’ve been seeing of late.

Let’s kick it off with the index charts before we move into specific stocks for subscribers.

SPY July 23, 2014SPY tried to go and looked great but did reverse today while some stocks held up well.

Expect more chop and sideways action with the exception of select stocks making this still a stocks pickers market.

CMG did great on earnings while NFLX didn’t.

It remains the earnings season of non-action.

I did try some SPY calls but got out at cost once the action stalled out.  No need to take risk with options in this market yet.

Have a great summer night.

Warren

The Longer The Base, The Higher The Space

**These are my thoughts on the SPY ETF in my Daily Trade Ideas which includes many, many more charts and setups.  Subscribe to my nightly Daily Trade Ideas on the right to see the rest of this letter.**

“If you personalize losses, you can’t trade.” – Bruce Kovner

A quiet start to the week with limited range in the indexes and stocks for the most part but we do have CMG and NFLX reporting tonight.

Those two companies can move fast and hard and we may be able to get a trade off in them Tuesday.

GOOGL hasn’t really done much since reporting Thursday night so, as I’ve talked about, this earnings season may not give us the action we are accustomed to during reporting times.

More basing action is fine, we just have to be patient and wait for buy points to come.

The longer the base, the higher the space, as they say.

And that just means that a long base leads to a much longer and stronger move when it does finally begin.

Sitting in cash and keeping your account and emotional capital intact, instead of getting chopped, up is truly a skill to learn and one that will take you from being a marginal trader to a spectacularly profitable one.

SPY July 22, 2014SPY remains in a tight range.

Above 198.30 is good while a move under the 21 day average isn’t.

There isn’t much else to say about that as the summer of slow action continues.

Thank you for reading.

Warren

Oversold Bounce Right On Schedule

**These are my thoughts on the SPY ETF in my Daily Trade Ideas which includes many, many more charts and setups.  Subscribe to my nightly Daily Trade Ideas on the right to see the rest of this letter.**

“I’m always thinking about losing money as opposed to making money. Don’t focus on making money, focus on protecting what you have” – Paul Tudor Jones.

Friday was strong after being oversold Thursday but still the moves look to be setting us up for some more weakness or choppy action.

Even the huge earnings mover GOOGL could only muster a $25 move, or 4%.

That is one of the better earnings moves we’ve seen so far but it is still very small for GOOGL.

We do have many more heavy hitters reporting in the week ahead starting with CMG and NFLX Monday so we could see some nice moves.

SPY July 21, 2014SPY had a good move and is now working off oversold readings.

I almost took some SPY longs late Thursday as real-time members know but I did not like the action into the close so I let the trade slide past.

A few more days and we could really break the 21 day average and see a move to 194 where the 50 day average will be by that time.

Hope you had a great weekend and are ready for some fun this week.

Warren

Oversold Markets Make It Hard To Consider Shorts

**These are my thoughts on the SPY ETF in my Daily Trade Ideas which includes many, many more charts and setups.  Subscribe to my nightly Daily Trade Ideas on the right to see the rest of this letter.**

“I’m more concerned about controlling the downside. Learn to take the losses. The most important thing about making money is not to let your losses get out of hand.” – Marty Schwartz

I don’t often talk about politics or world events but tonight, before I shares some brief thoughts on the lacklustre market action I do want to get a point across.

I’m not sure if it is because of the wide reach of media or if there are more disturbing events going on than what would be considered normal.

Whether it be the still missing young girls in Nigeria, the ongoing situation in the Middle East, the escalating crisis in and around Israel or now the passenger plane being shot down over the Ukraine.

We aren’t having the best summer in terms of making money but really, that is such a small and almost superficial/trivial detail.

If you’re as blessed as I am to have won the birth lottery and have been born in a peaceful safe nation, Canada for myself, we really have to give our head a shake sometimes.

We are so lucky to be safe and free and sometimes we just have to take a step back.

I know I can get frustrated sometimes at things that are really so trivial in the grand scheme of things.

I’ve got to really count my blessings and be grateful for what I have and the peace I enjoy in my life.

I hope we can all send a few thoughts out to those who aren’t as fortunate tonight and really take a look at the big picture to realize just how lucky we are.

Markets and stocks will turn around and make us lots of money, they always do, and continuing to live in peace is even more valuable.

Realize, what we have truly is priceless.

Markets continued to chop around with a bias to the downside.

We did see some decent weakness into the close but now we are seeing oversold readings and markets are at levels where support can be seen, at least the Russell 2000 looks that way.

I tried a short today using the TZA ETF which started to work, then came back to even so I got out for a tiny gain before the late day move lower came.

While I am playing small, I am playing safe.

If the trade isn’t working right away, I’ll get out.

SPY July 18, 2014SPY looks ready to roll over some more now but we are already seeing oversold readings making it hard to go short now.

Tops can take some time to put in and as I talked about on Wednesday, a slow summer of choppy and basing type action would be best.

Good times always follow these types of markets so all we really have to do is wait.

It’s easier said than done, but having patience is one of the most important skills to successful trading and investing.

This 196 level is a short point using the 21 day moving average at 196.11 as a stop area but again, we are oversold making it hard to short.

Have a nice night, Friday and weekend ahead.

Warren

Summer Doldrums Are Here In Force

**These are my thoughts on the SPY ETF in my Daily Trade Ideas which includes many, many more charts and setups.  Subscribe to my nightly Daily Trade Ideas on the right to see the rest of this letter.**

“Diversification is a hedge for ignorance” – William O’Neil

Another day with really nothing going on at all.

Enjoy the quiet as we’re in the dead of summer.

I recall one time when learning from a mentor.

He shower a chart of a particular strong stocks and he talked about the summer period.  It was much like now.

The stock in question looked poised to breakout in the summer and he said he was praying the stocks wouldn’t.

Wile the move would have been nice, a longer basing period of the whole summer would set it up to have a much longer base and rather than running out of steam into the fall, which is the strongest time of year for stocks, the stock would be fresh.

It would have a great, long base and be ready for the fall move.

That is what ended up happening and the stock made a spectacular run into Christmas.

I know how fun it is to have action all the time but in this game you can make a huge amount of money very quickly so waiting for the right time is key.

So far it looks like we will just base and chop around for the next couple months and have superb bases ready to go in the fall.

If this plays out, we should have a great 4th quarter and all this chop will be forgotten and our bank accounts padded just in time for Santa!

Patience.

SPY July 17, 2014Nothing going on in the SPY ETF today and that is fine and likely what will will see for some time.

Small trades are fine as long as you use tight stops.

I tried a small options position in the SPY today using puts and it began to work almost immediately.

It was really showing promise but then began to stall, then reverse so we were out at cost.

No big deal and worth a shot as long as you don’t risk much or anything.

Have a great summer night.

Warren

Choppy Stock Action Not Worth Trading, So Take Some Time Off

“I always laugh at people who say “I’ve never met a rich technician” I love that! Its such an arrogant, nonsensical response. I used fundamentals for 9 years and got rich as a technician” – Marty Schwartz.

We’ve had some poor days this summer but today has to take the cake.

Things looked ok Monday but today things fell apart.

Up, down, then a feeble attempt at up again before we began to roll over again into the close.

There is no point in being in stocks at the moment unfortunately.

It looked like we were going to have a busy and profitable summer but it has instead been marred by small loss after small loss for the most part, with some small gains thrown in as well, which is never fun.

That said, we may be able to get some decent trades on earnings news, starting with GOOGL later this week.

Bank stocks did ok today after some nice earnings.  They sure do have nice margins after taxes, fines and all other expenses.

Must be nice to be a bank…

Gold tried to bounce today but failed hard and the few miners who held up Monday collapsed.

It did looks like stocks were going to move nicely higher as soon as Janet Yellen ended her talk but the moves were short-lived and subdued.

It looks like it’s fine to take some time away from trading and enjoy the summer for now but as I said, we may get some trades come up shortly with earnings coming out more and more now.

Time will tell.

Small size and tight stops are essential for now if you’re taking any trades in my view.

This chop should set us up for a nice move into the fall which is the strongest time of year generally, but there may not be too much to do before then by the way the summer has gone so far.

Let’s begin with the index charts before we look at lots of sloppy and failing charts.

July 16, 2014SPY is rangebound between 198 and 196 still and really, if recent history is any indication, a move either way should be pretty subdued.

As I’ve been talking about lately, a nice long consolidation period would be best for the continuation of this bull market.

I’ve got some questions recently about why I say the bull market only began in 2012.

Many of you believe the bull market began in 2008 as soon as the low was put in at 666 on the S&P 500.

My answer is simple.

The base from 1999 to 2012 was just that.  A base.

The breakout in 2012 is the official start and all clear to this current bull market.

The action before that was all just completing the base.

I hope that helps answer some of your questions since I can’t get back to every single email all the time.

Enjoy your evening and Wednesday and maybe a few days on the links or the beach.

Warren