ddaaiilllyyy e iiidddeeaaallliiizzzeeeddd d tttrrraaaddeeesss o … · 2018. 6. 6. · and then...

1

© 2018 TheoTrade LLC. All rights reserved.

1 Idealized Trades Report for Monday, June 25, 2018

DDDaaaiiilllyyy """IIIdddeeeaaallliiizzzeeeddd TTTrrraaadddeeesss""" RRReeepppooorrrttt

Trading Lessons from the Intraday Frame (study)

2



Trading Lessons from the Intraday Frame (1-min)

3



For Friday, be very careful as the market holds support at the 2,755 level

which is looking into an Open Air Pocket (rapid sell-swing if entered)

beneath today's low.

For definition, we have the dominant thesis as the bounce/rally/uptrend

one (back toward 2,800) and the alternate breakdown thesis triggering

beneath 2,750 to open a rapid sell-swing (through open air pockets)

toward 2,725 or perhaps lower. We'll have the weekend to plan but be

ready to trade the departure.

Major Companies Reporting Earnings

None

Major Economic Reports for Tomorrow...

CS Home Price Index (9:00am)

Quotes from Last Night's Planning

Trend Day! The downside opening gap from the weekend triggered our ALTERNATE THESIS

which called for a LARGER MOVE to the downside - taking it a step further, we had price enter

our OPEN AIR POCKET beneath 2,750 which did indeed trigger or confirm the beginning of the

Alternate Thesis. Today is a perfect example of how we frame our day from our game plan

and then employ a Range Day or Trend Day style of trading.

I'm highlighting at least four examples of pullback/retracement trades that were profitable,

though #3 may have ended in a small loss or scratch. Today's session reminds us of the power

of planning and the trend day as it develops from start to finish (the arc pattern at the end).

4



"Power Trender" Strong Stock Scan

We're seeing the NEW top twelve relative strength leaders (via algorithm) in trending markets and the general

expectation is to buy retracements or breakouts in these strongly trending names. The logic is that what is

strong tends to get stronger (stocks attracting money flow tend to continue attracting additional money flow).

Right now these would be the names and thus candidates above for you to do additional research and add

these to your stock-scan list for possible inclusion into a swing trading portfolio on pullbacks or outright

breakouts.

HOW WE USE THESE STOCKS:

I write the Power-Trending Stock Section for Swing Traders looking for candidates that complex stock scans

will likely miss. The scan targets strongly trending stocks and the expectation is that price will continue

trending higher, though of course additional analysis is required rather than just buying these names

collectively. To participate in these stocks, we typically wait for a pullback/retracement to a rising moving

average or Fibonacci/Trendline level to put on a buy/retracement where the stop is trailed under the average.

These would be similar to how I describe intraday 'flag' retracements on a developing Trend Day.

5



Tightly Compressed SP500 Stocks (Low ADX Scan)

Here are the top six "Compressed ADX" (lowest ADX) values from our simple scan of the S&P

500 (in Think or Swim).

The goal of this simple stock scan is to identify compressed or consolidating (RANGE) stocks

and either:

A) Play the fades (like a Range Day) into the trendlines by shorting the high and buying the

low or

B) Put these on a separate watch list and then WAIT for a breakout event to trigger a buy or

sell-short swing trade to trade the RANGE EXPANSION play after the current CONTRACTION.

Or, you could trade more complex strategies like butterflies, iron condors, or even prepare in

advance for a possible breakout with straddles or strangles (advanced options traders).

We'll update this scan and ideas like it at the beginning of each week.

6



"S&P 500 Sector Performance" View

This chart and sector comparisons are useful two ways:

First, we get a broader sense of what's going on beneath the market subdivided into sectors.

Second, if you trade beyond the S&P 500 or futures/ETFs, you can pinpoint bearish/weak

stocks by starting with bearish/weak sectors.

The idea is out outperform the market via short- selling a weak stock(s) in weak/bearish

sectors on a down trend day (or vice versa).

7



Planning the 30-min Intraday /ES Volume Profile

With the break beneath 2,750 and 2,745, the /ES quickly entered the OPEN AIR POCKET and

then collapsed toward both the 2,725 (first) then 2,700 (round number) target as a powerful

and textbook trend day developed.

For Tuesday, we're looking for additional range expansion through the pocket, likely up toward

2,740 or higher which is the edge of the high volume node and breakdown support pivot.

It would be logical to expect a lower volatility or even RANGE DAY event tomorrow so be

prepared to trade both sides of the market should that range day development (small gap

filled quickly) occur.

8



/NQ Profile Grid

The NASDAQ /NQ logic is the same as the /ES and we're seeing the default 30min chart.

Its 30min Value Area Extremes (yellow) are 7,317 and 7,200 with the 60min Point of Control

(red) at 7,272.

The NQ did push/trade down away from its VA Extreme through the Point of Control and also

faces an open air pocket beneath it here.

9



/ES "Arc Trendline" or "Mirror Image Pattern"

Here's an example of a "Mirror Image Foldback" or complete Rally into High into Reversal

pattern (like a mountain) as a negative divergence preceded the reversal high into 2,790.

Price collapsed today, completing the pattern toward the 2,700 target and we'll begin Tuesday

with a "likely rally continuation" play or lower volatility event on the departure up away from

2,700.

10



Planning the Next Day (Daily S&P 500 Cash Index)

Price COLLAPSED in an alternate thesis TREND DAY event down away from our 2,745/2,750

support shelf all the way through the 50 day EMA (2,725 level) toward the final spike-reversal

shelf at 2,700; we're seeing an initial and EXPECTED bounce/rally up away from 2,700 which

will guide our thoughts and trades tomorrow. We'll expect continued upside on the bounce

back toward the 2,745/2,750 level but will anticipate a lower volatility session where it could

be a range style session allowing us to trade both sides (fades) of the market unlike trend days.

11



Disclaimer:

Neither TheoTrade or any of its officers, directors, employees, other personnel, representatives, agents or independent

contractors is, in such capacities, a licensed financial adviser, registered investment adviser, registered broker-dealer or

FINRA|SIPC|NFA-member firm. TheoTrade does not provide investment or financial advice or make investment

recommendations. TheoTrade is not in the business of transacting trades, nor does TheoTrade agree to direct your

brokerage accounts or give trading advice tailored to your particular situation. Nothing contained in our content

constitutes a solicitation, recommendation, promotion, or endorsement of any particular security, other investment

product, transaction or investment. Trading Futures, Options on Futures, and retail off-exchange foreign currency

transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether

trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of

your initial investment. Opinions, market data, and recommendations are subject to change at any time. Past

Performance is not necessarily indicative of future results.

ddaaiilllyyy e iiidddeeaaallliiizzzeeeddd d tttrrraaaddeeesss o … · 2018. 6. 6. · and then...

Documents