Trading Watchlist:
1. QQQ
As can be seen above on the 4 hour timeframe, the markets have declined so fast, and to such a large extent, that it is unlikely that the markets will continue to sell off hard in the next week or so without a relief bounce of some kind.
Therefore, it makes perfect sense to take full-profits out of QQQ immediately, and seriously consider scaling into a long.
2. HOOD
For similar reasons in relation to QQQ (above), take full-profits out of HOOD.
It is worth mentioning that HOOD is heavily influenced by the price action of BTC.
And because BTC is more likely to experience a price rally since its current decline, this makes it more pressing to take full profits out of HOOD, even though it has not actually reached the weekly timeframe major support level.
It is also important to continue practicing not being greedy by taking profits early, instead of trying to squeeze every ounce or percentage out of a trade.
In many cases, the difference between taking profits early and waiting for the price action to actually reach the perfect target level is so small (1 or 2%), that it is does not warrant taking the real risk that the market will correct at this point quickly by 5% or more.
3. SAP
For the same reasons as QQQ and HOOD, take full-profits out of SAP as soon as possible.
4. SFM
Take full profits out of SFM for the same reasons as the other trades above.
In particular, the price action of SFM has now fallen out of the parallel channel, increasing the likelihood that it will return to the scene of the crime (at the least) before it continues any possible strong decline.
5. IWM
For the same reasons as the trades above, start scaling into a IWM (RUTS) long trade as soon as possible.
6. UAL
The price action of UAL has rapidly reached the centre of its parallel channel.
Therefore, I am anticipating that there will be a relatively strong pull-back before it continues any possible decline.
In light of the fact that the markets (especially JETS airline ETF), overall, may be due for a strong relief bounce, I feel that it would be prudent to take full profits now.
And continue to monitor the situation for a possible re-entry at some point.
7. JETS
For exactly the same reasons as UAL (and the other short trades above), take full profits out of JETS as soon as possible.
But, also consider entering into a JETS long trade immediately due to its different price action structure.
8. COST
For the same reasons as all of the other trades above, take full profits out of COST as soon as possible.
9. SPY – (analysed) SPY looks like it will continue to decline as the price action does not appear to have reached any major support levels:
As a result, do not trade SPY long and wait patiently to see if I am right to not submit an entry.
Learning Points
- UAL – JETS – COST – Using the RSI instead of the Stochastic RSI proved to be extremely valuable for ascertaining if the price action was highly likely to experience a relief rally (bullish divergence).
Therefore, I re-acknowledge that having the ability to use different trading indicators when necessary is what is making the difference the professional and amateur traders.
Something which has taken me about 2 years to learn and start to perfect.
Next Actions
- Take full profits out of QQQ immediately.
- Consider scaling into a QQQ long as soon as possible.
- Take full profits out of HOOD as soon as possible.
- Consider entering into HOOD long trade.
- Take full profits out of SAP as soon as possible.
- Take full profits out of SFM as soon as possible.
- Take full profits out of UAL as soon as possible.
- Take full profits out of JETS as soon as possible.
- Consider scaling into a JETS long trade immediately.
- Take full profits out of COST as soon as possible.
- Continue to monitor the price action of SPY everyday to improve your ability to read the price action.
- Update trading spreadsheet with latest trades.
- Watch the latest “Trading the Close”.
