The markets are tanking this morning an hour before the open.
Leading the way to the downside is IWM off 1.2% followed by QQQ at -.89%. SPY and DIA are off less than 1/2%.
Of note, Oil strong, financials weak (off less than 1/2%) IBB off almost 1% as is TLT.
An interesting opening with TLT off with the markets. Typically you have an inverse correlation.
Going into today the markets were slightly oversold but if we get a continuation to the downside off the open we will be approaching mean reversion territory.
QQQ is oversold significantly right now. So it will be on the top of my mean reversion list at the end of the day.
One stock I am looking at is TSLA. It is plummeting. I am tempted to bottom pick but this morning is not the time. Perhaps I will relook at the stock closer to the close.
I am flat and not looking to do much with the open as I did yesterday. I found a great setup both in a stock and the NQ. Both worked out well and both were 10 min trades.
These trades put on the first 10 min of trading have the potential to turn into a monster win if there is continued upside during the day. Yesterday $ADD indicated that upside was on borrowed time so I took a rather quick profit on both.
$ADD is a very useful tool for monitoring short-term conditions. I have a 1 min chart and keep a very close eye on it for purposes of entry and exit into swing trades.
Another good thing about $ADD is that it helps you time an entry if your thinking about buying a stock or an etf. If it is reflecting a high chance of a trend day down it is best to wait to the end of the day to enter your position. I cannot tell you how much money I have saved using $ADD as a guide to enter either on the open or the close.
Several interesting reads I came across this morning:
http://www.tradeciety.com/how-to-use-the-stochastic-indicator/
http://www.thetraderisk.com/how-to-position-size-when-swing-trading/
https://traderfeed.blogspot.com/2017/07/self-awareness-and-state-awareness-in.html
On the news front, not much to talk about except that I have been commenting on the last several weeks. Nothing has changed. Congress gets back on the 11th so keep that as a reminder that health care will be front and center next week.
I suspect a lot of talk but no action. And then Congress gets the entire month of August off as a reward for doing virtually nothing.
I would be interested in seeing a line on whether the Senate shortens or eliminates their August vacation to get the health care bill passed. Some are proposing that, but the chances of that happening are virtually 0. The odds are as high as the Senate being required to have the same health care that they are raming down Americans throats:)
Enough ramblint, market opens in 30 min!
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
RickJ
RickJ’s Handicapping Picks
