ZOOM, ZOOM, ZOOM

Today's trade ZM. It opened up but it was screaming that the fast money was DOWN! At 10:05 I placed a 187.5 Put for $4.80 (8 contracts) put in my GTC .50 up and it sold at 10:19 for $5.30. If I hung on, which I generally don't do, I could have sold for $6.40 @ 11:25. What did I look at? 5,8,21,34, and 55 charts and the location of the moving averages with a strong moving average (the 50) as resistance on the 21, 34 and 55 chart and a market that was weak. Now I am done for the day and on to other things!

Awesome!!!!

It always makes me smile when someone puts on a profitable trade.

I noticed that many stocks did the same thing this morning. I was noticing that some of the stocks I watch in the first hour where having large direction changes and lots of gaps in both direction. It was kinda wild. Like a good boy I sat on my hands until things got sorted out. What made it strange was the fact that the volume was almost nonexistent. Then after the first 45 mins or so the volume returned to normal. It just struck me as odd that big gaps and direction changes where happening on very low volume. It was as if the MM where trying to find a place where the traders would take action.

Darcy I know you seldom (if ever) hold positions overnight. Usually I don't have a problem with that, but I have had problems in recent memory holding positions through the weekend. Last weekend it worked well for me, but usually it's been sort of "lackluster" to say the least. I've been considering updating my trading plan to have me NOT carry any trades through the weekends any longer. Thoughts?

R

The market is very volatile. The swings are big right now I think because of uncertainty. Inflation is rearing its ugly head. Also, this week is quad witching which causes a reaction in options. Although the trading volume increases in Quad witching, it doesn't necessarily render heavy volatility. Usually following the week of quad witching, the S&P declines. IF I were to trade and hold over a weekend I would buy way, WAY out in time. I mean WAY out...months out. Which would then mean I would need charts in the weekly and monthly time frame. I do have those but as you know I am never there. If you haven't been successful holding over a weekend, then I would suggest practice trading that sort of trade and leaving that alone for now. The NASDAQ hasn't touched the 50-moving average on the weekly chart since March of 2020 and the 50 and 200 moving average has a huge spread (4,000 point spread) DOW has a 6,000 point spread on the weekly between the 50 and 200 moving average. The DOW also hasn't touched the 50 moving average since March 2020. That's a very heated market.

Love all of this. I also found ZM for a trade upward on Friday. Quad Witching was wild on Friday.

It’s been exceedingly difficult to swing anything over weekends lately and most people that have done so based on charting have gotten wrecked (the few folks that I know that trade not in GW rules). I nearly grabbed SPOT March calls Friday afternoon but even a few months out feels like a better entry and nearer term expiry would be better off.

Going to look at your ZM trade when I pull charts up shortly.

A lot at play this week with several stocks sitting at points of pivot and at S/R along weekly and daily charts.
So much indecision out there at the moment, I will try and be apprehensively bold in my decisions (sounds good at least).
Liking ROKU this week, but will see how market moves.
Consumer staples are showing some classic GW positioning but again, tough to trust entries for long plays rn.

P.S. - seeing your ZM play now. Beautiful. I may not have taken it considering the 21 running interference on 34/21 but I’ll keep learning.

At 10:05, not at the open but at the close after the candle formed, the wick hit the 50 moving average and could not break through. On the 8 chart starting at 9:38 the candles began to break UP from the 50 moving average but the heavy 200 moving average was beginning to slant slightly down. At 10:02 on the 8 chart the candles could not break through the 200 moving average and the momentum of the trade up was losing steam. Confirmation for me happened on the 5 chart. On the 8 chart you could see the stoch RSI using GW's #'s was showing down. On the 21 and 34 chart the candles could not break the 50 moving average exactly what was happening on the 5 chart. It was so obvious to me that resistance was super strong. I stay in only for .50 up because I only want a small bite. There was no doubt in my mind I could catch this trade and honestly, I have not seen a more perfect set-up for a PUT. My best advice watch moving averages including Bollinger bands.

At 10:38 got in Roku 237.5 Put. 3 contracts out .50 up @ 10:58 Using moving averages for when to get in and it it was going to go down. Needed at least $1. move from moving average to moving average in the direction I planned my trade, Moving averages are support and resistance. Bigger the moving average the stronger the support or resistance for the candle.

Wow, that was wonderful as well.
Any reason that you were watching ROKU at that moment in time?

Think I really need to scale down the amount of tickers on my boards.

Cheers Darcy

I scope through a list of stocks I watch in the morning beginning around 9:45 -10:00. I do begin looking after hours as to the position of the stock and candle before the open. @ 10:34 candle on 8 chart engulfed the white one before it. This shows the strength is leaving the upward projection. 21 and 34 chart confirmed direction. I played it down on the 8 chart to the 20 moving average which showed me a possible $2 move. Here's a word that may help in understanding how I look at these things. Candles are metal and the moving averages are magnets. Magnets can repel or draw. Where that magnet is as compared to the metal helps in early ID-ing the direction of the trade. I have 15 stocks in my basket. If one really interests me, I use format on Qcharts in highlight my symbol in blue telling me to revisit when the 5 or 8 throws out the next candle. I made a time sheet for me for the 8 chart when a new candle would form. Set a timer for me to go and look at chart. If I am confirmed in what I see I am in the trade. Like FB today (1/10/22)