February 16th, 2017 Watch-list
Evening traders! Another strong day for the market as the DJIA gained 107.45 points and continued its run of setting new all time highs! How far this run will go is tough to predict, but if we've learned anything these past few weeks, it's to never feel too confident in a market reversal! When the market is rallying like it is now and we try and fight against it, it's like trying to walk upstream. With this market, it's more like trying to walk against a raging river. When we examine the daily chart for the DJIA we do see that we're starting to see those indicators get a little overextended. We'll keep a close eye for a 3/4 sell signal there before we target any form of inverse ETF play. Our strategy has been to remain light and target a few select set-ups, and so far it's worked fairly well with wins in UAA, AMRS, SGY, CVM, and a positive average for GNK on our two trades there. We did suffer losses in SDOW/SPXS, OCLR, and DUST. With these losses it is key to maintain that 1/2 R/R ratio. Even with the losses one would still be profitable for the year if they held to that ratio, all other things remaining equal. Daily chart for the DJIA below with key support and resistance labeled for review.
GNK: Our initial profit target for GNK was hit on Tuesday, allowing many to lock in profit. We ended up trading this one twice with a loss of roughly 5% and a win of roughly 10%, putting most people in the green overall by 2.5%-5%. If you happen to still be in this trade, I'd recommend, at a minimum, moving your stop loss up to your break even price to reduce risk.
Current Open Positions:
HA: Presently we're up roughly 0.16% on this trade. As I mentioned in our last update, some of you had already gotten stopped out of this trade and are in for a second round. Another example of why we should always honor our 1/2 R/R ratio stop loss. Chart below for review.
New Plays Added to Watch:
Nothing new to add to watch this evening. I am remaining very conservative at this point with what we target. A lot of overextended stocks and oversold inverse market ETF's out there. If we can see this market show some weakness, maybe we target some inverse ETF's in the coming days. I'll continue to scan and if I find anything that I feel is worthwhile as a swing trade, I'll let you all know. Remember, quality over quantity. We'll have months where we only make 5 or 6 trades, and months where we make 5-6 trades a week. It's all about patience and consistency with our strategy.