I want to give you guys a piece of advice about these Sunday Preps. These preps are designed to show you how I analyze the market, how I create ideas, and how I use the tools to create my own plan. I really encourage you to use these solely as a pattern for you to follow to create your own plan.
That being said, please do not copy me (or anyone else for that matter).
There’s a few reasons why copying trades will never work.
- You wont have the conviction the original creator has. Without conviction you will struggle adhering to the plan (or worse, not understanding the plan).
- If you simply copy trades, you simply wont know when the idea is wrong. Market conditions change and not realizing when an idea becomes invalid places you in a very dangerous situation.
- If the idea starts to go against you, and you don’t understand the idea, you may be prone to seeking confirmation bias. Instead of considering the idea wrong, you may seek others who agree with your bias (long or short).
If you really want to become a successful trader you must put in the work. You must put in the work! Lastly, you must put in the work. Prepare your own plans, ideas, and perspectives.
I put out the Sunday Prep so that you can hopefully find interesting ideas for your own trade plan. I want all of you to make a killing but it won’t happen if you’re not creating your own ideas and trade plans. Where will your trade be wrong? What will you do when you’re wrong? Where will it be confirmed? What is your profit target?
I can’t give you these answers. Only you can.
We’re officially in Q4. This is YOUR opportunity to really get in gear and finish the year strong. Make Q4 YOUR QUARTER!
Method and Mindset
We just wrapped up our 4th episode and it was really great. In Method and Mindset I’ve teamed up with Kim Ann Curtin from The Wall Street Coach to provide a 30min to 1hr coaching session for a trader. These are totally free and we’re looking to provide real value and (hopefully) some actionable information they can take back and improve with. Guests also get 3-months with TrueTrader so we can keep the help and mentorship going.
If you’re interested in applying for a guest click the “Become a Guest” button at the top of methodandmindset.com to submit your application.
$ES / $SPY
BULLISH TO NEUTRAL: Broader Market Analysis starts with the ES. Last week we talked about the first red flag of many. The break of previous month lows. (Aug lows were broken in Sept). Now with Sept lows being broken in Oct already. I still don’t think there’s anything to panic about.. At least not yet. Why? Because we’re just pulling back into the Weekly 20 SMA.
I try to understand what timeframe we’re extended away from the 20 SMA. Oddly enough you’ll find support show up at this SMA. We’re not extended on the weekly anymore. The ugly setup on the daily would get me concerned IF we were extended from the 20 SMA on the weekly chart.. But we’re not.
I would like to see Oct be a narrow candle. Then in Nov stuff and come back under. I would like to see a lower low on a higher timeframe. That would be the red flag I look for.
The other thing that could happen is we just go sideways for a while. If this happens then the big move up will begin getting digested. Then I’ll formulate some long setups. Also, if we start to see some long setups gear up from here and we start making ATHs.
The way I’ll be playing this market this week:
If we gap up on Monday, I’ve got quite a few names on short watch.
If we gap DOWN on Monday then I’m hands off until we see some support show up somewhere around last week’s low.
I want to see Friday’s lows hold. If they don’t, it’s not the end of the world. I have some a support around 4200.
$NQ / $QQQ
Nasdaq 100 – Tech Sector. If we gap down I’m looking for 1440 (support from July). If we lose that, then I’ll look for the psychological 1400 level. If we gap up, I’ll be looking to short pops.
Bitcoin. What I use to guage the crypto currency market in general. I didnt expect this to be back at 48k so fast. The speed of this gets me thinking we’ll see BTC go higher. 53k is the first level of resistance. 40k is the psychological low level of support.
Strength is still in the energy and financial sectors. But with energy I don’t want to chase it up here. Imo, it needs to pull back and cool off.
Consumer staples could have found a bottom after a nice correction down to the 200d. If it catches a bid, I have alerts set for names such as $ADM $TSN $EL and $SYY
Strong Stocks Looking for Continuation
Kind of trying to possibly position for a swing, but think there are some day trades in here as well. Early weakness and I may look to scoop between 44.3 annual pivot and 43.8
has been on beastmode since we discussed the breakout of the long base. Looks ready for the next leg up after retesting that important 570 level. Would watch for a flush to psychological 600 level to hold. May even buy some calls on this for a month or so out. I think 700 is in the cards if the market can right itself.
needs a deep pullback to get me interested, but i’m in no rush. 139-140 is the area I want to start considering it. It very well may push towards 145 where I’m hoping it finds enough resistance to send it back to my levels. Remember, in the bigger picture this could have a really move setting up if we finally get back over those highs put in back in May
financial sector has been strong. Want a dip to 165.5ish to get long. Can see that would be a 61.8% fib retrace of Friday’s strong action as well as some key levels from Thursday and Friday intraday.
Back to back inside days getting tight against the upward sloping 20d. Want to either buy a flush towards 113 with risk under Wednesday’s lows or if we push back above Friday’s highs then I will possibly look to build in long on dips as long as we can hold higher lows. Over 121 should send it.
Oversold Reversion Setups
Strong name that had a deep pullback from the extension. Down about 15% from highs right into the weekly 20sma. Looking to scoop weakness with risk against Friday’s lows. 154.50-155 is the area I’m interested in. This has a lot of room to move back up if we are catching the turn here. I think 160 is possible the same day and 165-168 within a week or 2. Remember, this is assuming we ARE catching the turn here. If we lose Friday’s lows then it might want the 200d.
You may recall this one from last week’s Sunday Prep in which it was a short idea. Well now that it’s coming in, I would love to play the long on it if it could speed up down into the 200d area. It very well may reverse from here though and if it does, I’ll most likely skip it. I want my area or nothing.
This is the same sector as Target, obviously, but this one bounced right off the weekly 20sma on Friday. So if Target doesn’t want to come lower to where I want it and the retail sector catches a bid, I will look to play Walmart off of 136.5 flush with risk under Friday’s lows.
Weak Stocks Looking for Continuation
250-252 or under Friday’s lows and look to short pops and join trend. If 250 area doesn’t get defended by the bears, i will look for re-entry in that 255 area where the gap fill is and most likely have longs stuck from the gap down on 9/28
351-353 with risk over 355
Just looking for an emotional pop back into the 90.7-91.6 range to fade. I know the ATR is $5 on the name, so I’ll keep a tight leash on it because I’m not looking to ride this up 93. I would much rather stop out and look to re-enter at higher prices.
Almost a $12 ATR on this over-valued behemoth, so as much as I would love to play the fade off that 330 level, I’m gonna wait for 340-341 before taking a shot on it if it starts to rip towards the 20d come Monday. Has a bigger market cap than ROKU, which I also think is GROSSLY over-valued.
Overbought Reversion Setups
Looking for an exhaustion move straight up into the 64 area for a fade. Needs to just go right off the open for me to really care for it.