Perception is all about time frames.  You may be right on a position, but it’s all about the time frame you trade in.  You may be right too early, and sometimes so early you can’t afford to be right.  

A lot of talk about the stock market going to shit has been happening for years.  You’ll hear a lot of shit talking and then when the market finally takes a shit, those that were short early on as the bulls ripped up will be saying, “I told you so.”  Some of them can afford it, but others can’t.  A good example of this is Bill Ackman and his short on Herbalife.  He had to close it at a loss as high as $740 million. 

So as I look at SPY/ES(futures) I see that we are obviously in an uptrend.  We’ve gone up ever since I called that I was looking for long opportunities. I was looking around the 2800 area on ES and we got close to 2796.  You can’t be too precise with targets because a lot of people see the same target and they try to get ahead of it.  The shorts got ahead of the 2800 area.  It was a good place to exit at gains, and now I’m looking to re-enter.  The direction is up for grabs. But let’s see the position we can swing on.  

As you can see on the daily chart above, we’re on the upper band of an uptrend.  The trend is your friend for the trend traders, so if you’re a trend trader, you should be BTFD!! (buying that fucking dip!) I’m a breakout trader…so I’m waiting for a break of a trend or range.  I know we need to go back to the blue line and look! It is at the top of the trend. My money is that we hit that that and from there, we breakout! Yay! New highs….

Ooooooooor we go back down from that spot, and the bulls get caught in a trap. Let’s not forget that next week is the start of earnings season, AND quite a bit of economic news is coming out in regards to trade and whatnot….soooooo we can go anywhere.  

Why time frames are important is that on the weekly, we have a rising wedge.  This has been a pattern that Wags and I have been capitalizing on lately.  Wags introduced me to shorting these shapes and I’m loving the new revenue stream.  On the weekly, you see that we’re getting close to the tightening area and it is right at the blue line on the daily chart where it should get tighter.  Most rising wedges end up in a nice short position and rarely, but sometimes, it shows a turn to the upside.   

I’m looking to go long above the blue line and to short of the rising wedge pattern on the weekly.  In the meantime, I’m riding the trend.  Keep in mind your timeframes and what you’re trading.  Don’t get too short too early or too long too early unless you can afford to be wrong for the timeframe.  Be flexible, be nimble, and most importantly, be profitable.  

-RM

Earnings Season…it’s the most wonderful time of the year. 

Well shit.  FB, AMZN, NFLX, GOOGL.  All have reported along with others and with AMZN beating the shit out of estimates, we got rotation coming back into tech.  As I’ve mentioned earlier, commodities were leading a rally…that never works.  Today we saw buying.  It was so fucking boring today…it’s just the way I like it. Why? Because I was long from last night (with the exception of FB). I don’t play earnings, because that’s gambling.  I don’t like to gamble.  The odds are never with you.  The house always fucks you.  I lighten up before earnings.  I lightened up a lot on FB and gambled a few.  I lost.  

 It doesn’t happen often, and when I do lose, I like to keep those small. 

The only other stock I held through earnings was AMD.  I lightened up, as usual and I bought back more this morning.  

We’re still above support on the monthly level.  My price target is ~$20. 

Earnings are here and we’re in the meat of it all.  Today’s rally was led by tech and we should keep the momentum going into tomorrow after Amazon’s stellar report.  Up 10% in one day is just a damn sexy sight to see.  

So how boring was today?  So fucking boring we were arguing where the market was going and if we’re biased.  There is some concern as to where the market is going and I see where that concern can come from.  We’re about to converge on trendlines on the daily.  The two purple lines…they’re inching closer and closer and then the market breaks one of those, that is where we’re going to go.  

That is the case to be in cash.  

The case to be bullish, like me is to count ’em.  1. 2. 3.  Three times we hit a bottom (200 day moving average) and 3 times we came back up.  We hit that shit a 4th time, and bye bye. 

 

Market if we hit the 200 dma a 4th time. 

We are making lower lows, but we’re at the point now where we have to make a higher high and hold it.  We made a higher high before but the market got smoked.  Today is 26-Apr and the Fed meets 1-2 May.  We have 3 more trading days left and we’ll see if we can break out of a trendline before then.  Even though, I’m bullish, I have so much room I can easily exit and switch short to go where the market does.  I’m bullish, but I don’t mind admitting I’m wrong and switching sides to the short side.  For now, just keep buying the dip and selling the rip. 

In the meantime, I’m extra bullish on crude oil.  I want to see $75.  We’re at $68.  It’s a failure of a trade if it goes down to $64. 

-RM