Irish Born Investor's avatar
$24.1m follower assets
Market Breadth Review - 4th August 2022
I use a range of Measures to get my opinion on the market. I do not use headlines or FED meetings. I look at the price and participation of big money. My opinion on recessions, inflation or interest rates are meaningless. I would much prefer to look at factual information on market participation.

I have been bullish and long positions in the past month. I am still bullish until the market tells me otherwise. I will however take heed of the fact that almost every trade I do is working right now. That is the moment you need to make sure that you protect capital on any turn. I do not want drawdowns and will simply refuse to have them. I see some bases that are wedging upward in popular names. This should urge caution as they are not proper bases.

Conclusion: Short Term Overbought with Improving Breadth. Caution on new positions in the short term.

High vs. Lows
Starting with the High vs Lows (Advance Decline). This is one of the measures I quite like and is a useful tool. Note how the Lows began to spike when the market topped in November. The decline in participation was building for weeks. We are finally seeing some improvement with Highs out numbering Lows however it is very low double digit numbers. This could easily reverse. We want to see it in the 100s for any longer term proof.

Put Call Ratio

Put Call Ratio below showing that the market is now tilting bullish however we are still making some higher lows on this for what that is worth. I saw a Goldman note this morning that Bullish Call Options were approaching the 2021 Meme Frenzy. That gives me caution here. There have been some insane squeezes in the last few weeks. Put Call hasn't shown a large spike to the 1.6 PLUS area where it has in previous crisis or bear markets.

Moving Averages

Stocks above the various moving averages is improving. In my opinion we are currently overbought or very close to it in the short term. This is an important moment in how we will hold up in any potential market breather or pullback.


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Irish Born Investor's avatar
$24.1m follower assets
23rd June 2022 - Trading Journal & Market Breadth
Today's trading journal is brought to you by IBKR. I use them as my main brokerage for both investing and trading. As a European investor I have tried several different platforms and I can safely say they have the most comprehensive platform available to any EU based investor. In terms of platform power, safety and products (Stocks, Options, Futures etc.) You can check out the platform here.

Market Outlook:

According to my charts the Russell is bouncing the hardest. The $QQQ & $SPXC remain somewhat lacklustre for now. New lows have dropped however.

$QQQ Stocks Above 100 Day, 150 Day & 50 Day

$SPXC Stocks Above 100Day, 150 Day & 50 Day

$SPXC $QQQ $IWM Stocks Above Short Term 20 Day Moving Average

$SPXC $QQQ New Highs/New Lows

Pre Market Work:
I have been somewhat lax this week with a trading journal. I actually missed a planned trade on the $SPXC futures with a limit order by .25. At the time I was fine with this but yesterday I entered a similar trade much earlier than I'd usually like and I am putting it down to a touch of "I'm not missing it again". I stopped out and later entered a better long trade with very tight RR to end the day in the green. I also attempted a trade in $VIVO as biotechs are looking strong but the volume wasn't there and I stopped for a decent day trade profit. I am working with my scans and updating my watchlists but right now I am somewhat suspect of the rally. I do not see sustainable swing setups that I am happy to take so I am biding my time with a few hit and run trades here and there.

Trading Day:
Here is the basis of my trading plan today. If i get a really nice entry to the futures I will go long for a potential run to $3850. I will also see if there is any movement on my watchlists but realistically I don't believe this will be the case.

Traded $GTLB & $VIVO along with $SPXC by way of futures. Ended the day with a small profit. I should have continued both first trades as swings but I'm still so hesitant and slipping back into day trade mode. Which isn't necessarily a bad thing to be super careful but I choked my trades yesterday because I didn't want to see them even go barely red.

No positions going into Friday.

Notes & Open Trades:
  • No Positions

Please note I operate my risk with options that I can lose 100% of the premium. This is the safest way to trade them in my opinion. Even if I cut at 50% once I am setup to lose 100% within my risk threshold then I will stay ahead of my required R:R.
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Irish Born Investor's avatar
$24.1m follower assets
16th June 2022 - Trading Journal & Market Breadth
Today's trading journal is brought to you by IBKR. I use them as my main brokerage for both investing and trading. As a European investor I have tried several different platforms and I can safely say they have the most comprehensive platform available to any EU based investor. In terms of platform power, safety and products (Stocks, Options, Futures etc.) You can check out the platform here.

Market Outlook:

I want to develop this section somewhat along with the tools I use to measure the market. I have been building some simple market breadth indicators and charts. These could be very useful to any trader or investor. h/t to StageAnalysis on Twitter for some inspiration on these. All of these are built in Tradingview.

$QQQ Stocks Above 100 Day, 150 Day & 50 Day

$SPXC Stocks Above 100Day, 150 Day & 50 Day

$SPXC $QQQ $IWM Stocks Above Short Term 20 Day Moving Average

$SPXC $QQQ New Highs/New Lows

The above charts are useful warning or buy signals. For the moving averages you want to see at least 30% of stocks move above the main averages before considering a buy and you want to see that trending upward. Same for New High/Lows. As you can see today we have made 618 New Lows while only making 2 New Highs! That is not a market you want to buy!

Pre Market Work:
Only stock that caught my eye today was $GO. But not looking for any swings while this level of selling is happening. Trimmed all my watchlists with the stocks that have been badly broken the past week.

Trading Day:
Executed a small but good $SPXC futures trade toward the end of the day today. I entered at $3642.00 with a stop at $3635 and a profit target of $3665. I sold after a few minutes at $3670 exactly. Perfect in and out trade. It's really nice when they work like this.
End of day Thoughts:

It's very important in a market like this not to force trades. I've said before that if I try to consistently day trade I get frustrated. When I am working toward swing trading it's interesting I find the one or two hit and run day trades much easier. It's as if there is no pressure and I am far more patient. It is such a different feeling to sitting down at the beginning of the day searching for trades to make.

I hope we begin to level out soon however for now I will remain patient and look to make small moves or none at all. Tomorrow is a large options expiry date volatility and shenanigans will be high!
Notes & Open Trades:
  • No Positions

Please note I operate my risk with options that I can lose 100% of the premium. This is the safest way to trade them in my opinion. Even if I cut at 50% once I am setup to lose 100% within my risk threshold then I will stay ahead of my required R:R.
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Good on your for keeping a trading journal. I've started at least 3 times but it never sticks. Do you journal daily?
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Irish Born Investor's avatar
$24.1m follower assets
15th June 2022 - Trading Journal
Today's trading journal is brought to you by IBKR. I use them as my main brokerage for both investing and trading. As a European investor I have tried several different platforms and I can safely say they have the most comprehensive platform available to any EU based investor. In terms of platform power, safety and products (Stocks, Options, Futures etc.) You can check out the platform here.

Situational awareness:
Note: June 10th all my stops were hit and some trades I actually cut before the stop was hit: $ZM & $SHLX to be precise. The market action was dire and in times like this it's best just to step aside.

June 13th & 14th: I made some day trades - shorting $DOCU, $HES & $CVX intraday for opportunistic small moves with size on a heavy downtrend day. June 14th I had a small win on another intraday trade with $LI on Chinese strength.

Not much pre work was done on these trades and I find they are difficult for me to do consistently on a daily basis but in short hits here and there when the trade is very obvious or good RR I'm okay with it to give me a small green day when there is no point in looking at swing setups.
Pre Market Work:
With the FOMC meeting today I will be simply waiting to see what happens with that. I have been studying the $SPXC this morning for a potential "scenario". This is mainly just an exercise but nevertheless here it is.

When the market has these moments such as the Fed Meetings or catalysts it tends to make a quick fake move one way in the minutes after the announcement or news then reverse the opposite way. This could happen hard today. I have no idea which way that will occur if it does however here is a potential.

We make a quick red move after the meeting then hard rally upward toward the 3900 area. This would catch a lot of people offside and the market likes to do that. The reason for the 3900 area is the gap and the 10MA.

Or maybe the market plummets. Who knows. If i was to trade this scenario I would be using the current market low as my area to trade against. That way the risk is managed objectively and the upside is great in terms of RR. 10:1. If the stock moves up instantly and you miss your entry well then that's that. Never chase.

Again this is scenario building out of interest.

------------

In other notes a lot of names were reset but Chinese stocks are still looking like they are making interesting moves. $PDD & $LI in particular.

Trading Day:
I eventually took the $SPXC trade using Mini Futures. I executed it fairly okay. It could have been done better but the idea played out to perfection. This was the only trade I took today and moved my account almost 3% with an excellent RR and risk in check.
End of day Thoughts:
In trading you do not even need to be right 50% of the time. You can become a multi millionaire being wrong 80% of the time once the odds are skewed in your favour. If I can flip a coin over and over and receive 2 Dollars every time I hit heads and only lose 1 Dollar ever time I hit tails I will compound. Now imagine you win 3, 5 or 10. That coin flip can actually be rigged against you in terms of win rate and you will still come out ahead.

Stanley Druckenmiller says SIZE SIZE SIZE when you see your opportunity skewed heavily in your favour. Pradeep Bonde calls it picking up free money.

That is the essence of trading and getting that mindset.
Notes & Open Trades:
  • No Positions

Please note I operate my risk with options that I can lose 100% of the premium. This is the safest way to trade them in my opinion. Even if I cut at 50% once I am setup to lose 100% within my risk threshold then I will stay ahead of my required R:R.
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Irish Born Investor's avatar
$24.1m follower assets
25th May 2022 - Trading Journal
Situational awareness:

Cautiously bullish on the day today. Green futures and the markets somewhat due for that fabled bounce. Always wary in this bear market that the green open should flash danger for a fade later in the day. The opposite of the bull market.

No real intention to do much today, just monitor positions.
Pre Market Work:

I continued looking for setups, trawling through charts for potential. I quite like a setup in $HDSN. I actually saw this name mentioned by a Twitter trader Nathan Bancroft. If you want to check him out he posts interesting charts. Hudson are a refrigeration/air condition company for commercial customers.

There are plenty of ways to draw this. Most would draw a triangle/flag shape but it's all the same really. So I like this because of the volume spikes and nice upward movement on the chart in stair step fashion. What is more to like is the drop off in volume everyday. This suggests that a move is going to occur. Supply is drying up. It's right at it's 10EMA which is usually a nice position to trade against. What is more interesting to note is the longer story. See below, when we zoom out.

As you can see we are at an important juncture on this chart's history. A break out here could lead to rapid advance. A stock like this can be very volatile so risk management is key. I will want to see this breakout before I buy and then I will keep it on a measured leash probably using the 10EMA area as my stop.

Nothing actionable for me today just trade management.

Trading day:

No moves today just closed the $NOG. Calls for 30%. This trade wasn't doing anything particularly wrong but with options I always want them to go quickly. So I was content to close it here and move on. The oil trades are so crowded now that I am edgy being involved.$NOC. performed fine today. Stayed in the upper section of yesterdays range for a tight day. Nothing to worry about here, just leave it do it's thing.

End of day Thoughts:

We are on track for an inside week on the $QQQ & $SPXC on it's own this isn't worth much but it will be the first inside week in 2022 for either index. I understand the markets are closed on Monday for Memorial Day meaning we can expect lower volume on Friday as Wall St. heads off early on their holidays. On low volume days there can be wild volatility and somewhat nonsensical type moves. Worth noting.
Notes & Open Trades:

$NOG - June 17th 30$ Call - CLOSED 30% Profit
$NOC - 5% Stock Position - Entry $464.50 - Stop: $455.50 (Yesterdays LOD/10EMA)
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