How important is $ADD in determining the profitability for swing trading entries in stocks?

Markets are gapping up this morning with QQQ lagging.

Of note, Financials, and oil strong, metals down along with TLT.

Overall premarket looks slightly positive.

I have mentioned this before that this market is despite the constant move to the upside is not that easy to trade if you’re  swing trading.

swing trading

Breadth has not been that positive and I cannot remember the last $ADD 1400 day.

Typically what we get is positive Breadth on the open with breadth immediately trailing down. Yesterday was a very good example.

That is why is good to wait 10 to 20 min on the open to figure out where the market might be heading and what the risk is for the day.

I view breadth in the way I view betting on teams that have 75% of the public on them:)  If breadth is -1400 on $ADD you do not want to be on the long side.  Not a great analogy but you get the point.

It adds a little protection in the long run by having a filter like this.

In sports betting for me I have a lot of absolute filters that take the game away from being a potential play. But very few that put the game automatically into a play category.  Its the same way with swing trading.

As we head into today, the markets have gotten into slightly positive bias short term. The news as far as I have seen is unchanged overnight. And the way the news is going that is a good thing!

I added several bottom reversal trades yesterday in CORN And Weat. Similar to the UUP trade.

I have on my list JO and UNG for potential trades also.

Let me mention that these trades have no higher than a 50 50 win rate. But the gains far outweigh the losses in most cases. Much different than mean reversion trades.

My stops are pretty tight on these as a good bottom reversal setup trigger will work right away. If it doesn’t its best to get ou and wait for another trigger. Remember your going against the trend. So if it does not work many times your heading for another leg to the downside.

UUP is not out of the woods yet. But it still is a live trade.

Breakout trades are few and far between now as Breadth has not been very accommodating.

If you want to follow some of my trades along with my thoughts typically given after the open you can go to @rickjswings. Typically I talk about the overall day expected with the markets and also give some levels on the ES and NQ for failed breakout scalping.

It’s my private twitter feed for the stock market and its free. Sports Handicapping is the subscription-based part of this site. But considering the cost of joining it’s almost free:)

Good Luck Today


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