Wednesday was a good example of how the environment for short term swing trading is not as easy as it looks, despite the fact the market is running to the upside.
The market started out making new highs and then settled back almost 80 dow points midday. If you have tight stops your going to get whipsawed. If you have wide stops you increase your variance.
There is no easy answer to this. So I tend to use 240 min charts for my stops and use a stop that is volatility adjusted. It is not perfect, but so far its the best I have found for my swing trades to avoid getting whipsawed.
I am still long my SPY position I took a few days ago, and as its a system trade, I will just wait for my exit.
This morning it looks like the rally has more room to go. Indexes are gaping up about .15%. Although the CPI reading just came out with expected readings. And so far that has sent the markets reacting lower.
We have an hour to go, and my expectation is this knee jerk will be reversed my the open.
TLT is off almost 1/2% and Vix.x is slightly negative, with crude positive. This to me is a slightly positive pre-market environment.
Aside from Powell, the news out last night was Iran trying to take over a UK ship. Tensions are still very high in the Mideast, and I doubt things are going to cool off anytime soon. So far Iran does not appear to be backing off it increasing enrichment nor its aggressive activities in the region.
Back home we have the fallout from the Epstein arrest. And we have Mueller scheduled to testify in a week before the House.
My prediction is that the Mueller testimony will end up more favorable to the White House then unfavorable. As far as Epstein it seems there will be many more high profile arrests coming. Many of which will surprise many.
There little to no chance Trump will be drawn into this, except for the propaganda media. But since I get my news from other sources, they do not influence me. The mainstream media have become a full-time propaganda machine at this point. If you are using them for your news sources you are doing yourself a disservice.
Today I will be managing trades, with perhaps adding one or two more swings. The market is strong right now, and its the time to take advantage of the tailwind you get.
I tend to do a lot of reading early in the morning and a short newsletter I enjoy is https://www.morningbrew.com/. It’s a short read but entertaining.
As a part of my sports handicapping subscription, I send out almost all of my trades via Viber. This has been a nice value-added feature of the handicapping service. At $49.00 a month for all sports plays I handicap, you get most of my stock trades.
If you want to follow some of 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
RickJ’s Handicapping Picks