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Warrior Trading Blog

Slow Markets! $-280 | Mike’s Trade Recap

Mike_7.23

Hey, what’s up guys? A little bit of a slow market here to start the week. I had zero trades yesterday, and we came into today with a set up that looked pretty decent, but the markets kind of killed the trade and I took a quick loss of only 280 bucks. When I saw the trade just wasn’t working and the market alignment wasn’t there, I just decided to cut it loose and call it a day. Just the action is very slow and choppy, and we’re not seeing much momentum. Let’s take a few minutes and break down, today’s trade in the recap.

All right, good morning, everyone. Time for a quick recap here of today’s action. Definitely still seeing some inconsistencies in the momentum in the market, but again, it’s summertime and that’s to be expected. You’ve got to be quick on the outs when the trade isn’t working. But then, also on the flip side, be very aggressive when something is working. And we did that last week on the CSX trade. I made over 10,000. Today is just a very small step back down 280, just over 280 bucks.

We tried one trade on this, KO had a really nice looking set up here and we just decided to stop out because it wasn’t pushing and then the market really started to turn over. So just decided to cut it loose quick. Take a small loss and sit tight for the remainder of the day.

But I want to talk a little bit about the price action. It is actually now continuing to go since the market has reclaimed the VWAP and this is off the lows, but let’s take a look. Talk a little bit about what we saw on this trade. So KO earnings play, first of all, that’s always a catalyst that you want to pay attention to when you do have an earnings play and the stock is moving, especially in the premarket, you want to pay very close attention to it if the technicals do align. So today on today on KO, you had a gap higher, right? And you were gapping back above the recent highs 52.47 so a good gap higher over the recent highs and you really had some room to run, right? You got a little bit of a macro trend line here but that’s not for quite a ways higher.

The only other trend line that you had that was of some interest to me was this one right here. It starts with the the gap, right? You can see the gap down, this huge gap down. I sometimes like to look at these because you get the shock value from the gap and I like to kind of use these trendlines here like this. You can see we’re coming into it right now. We’ll see if we actually reject off of it. But that was really the only near term resistance that I could really see on it of any sort of significance. And again, we have the shock value of the gap plus it’s high volume. So that’s definitely a good anchor point to use and that’s the only trendline that we really had to use on it until we got much higher up here until around around 56 or so.

But you can see, gapping up, earnings back above of all time highs and a good pocket to run. So with that, go back to the five minutes here and you can see that we had some room to run to that trendline, which basically from the open from 53.40’s, all the way up to 54’s or so, it’s a decent run about 1% or more run. But if it gets through that, then you open up into a big window, which it is attempting to do right now. Again, now that the market is trying to hold a low for the time being.

But as far as what my trade was is I sat tight on this for the first five minutes. I wanted to see some confirmation here. Basically I wanted to see it get back over the high.

I didn’t like this first big rejection, but once we started to kind of grind back higher here and we got back above the opening range high, I decided to try it long because we did have some room to move. So if we go to the fast time frame and we look at this, you’ll see that you have the initial sell off, right? You had the initial sell off here out in the open, but you do come right back and you grind up and you’re coming to test this high. So I got long as we tested the high. So if we run through this in what would be real time so you can see exactly what I was looking at, was this right here. Okay. So we’re starting to grind back up. I’m starting to watch it at this point because we’ve now made a nice reverse off the bottom and I’m going to use this kind of opening range high now as my pivot to determine whether or not this is the spot that I’m going to get in.

All right, so now that we have that, we’re kind of watching it and watching it, watching it. Here’s the break, right? Here’s the break. And remember we always want to see confirmation, whether it’s on whatever time frame you’re watching, I like to see some sort of confirmation and confirmation is when you back test the level and hold. So we want to see it back test against 53.60 and hold. So what happened was, as we started to move, we got this move right here. And as I saw this starting to back test and we were holding, if we started to push back up, I was going to buy it. I was going to buy it and anticipate the break above 54 and look for that move through that trend line and volume to come in, of course. So as we start moving, there’s the hold, here’s where I’m buying 53.60’s and we start to push. I’m adding to the trade here 53.70’s. I added more into 53.80’s and 90’s, looking for that big push higher. Brought my average up to about 53.72 or 3, I believe.

So that is what I was using for the stop now, which was back here at this pivot because we did hold the opening range high, we started to push off of that and we made highs. So we know we’ve got a well-defined pivot in through this level right here that, if that comes back and passes down through, the trade’s probably, the trade’s probably over with, it’s not going to work.

So as we started pushing higher, it looked really good, looked like they were going to get that push through the highs. So I kind of stuck with it. I had a little bit of a poll here. We tested the pivot but we were okay. I kinda sat with it here a moment to see if we would catch support on the pivot and give it a chance. Remember this is only a 24 second time frame. So these candles are occurring pretty quick and I just want to give it a chance to see if we’re actually going to hold a pivot.

We held, right, we held, we looked really good, came back and back tested again, started to push up through the highs and then we kind of rejected that. I didn’t really like that look because I wanted to see it push to the highs and push through 54 but still sitting with it, still sitting it and at this point right here, I noticed that the market was starting to turn over. So instead of waiting for my stop to hit, I just blew out of this at 53.65 right in through here as we kind of made this lower high and I took about a 7 cent loss. I had 4,000 shares. So that’s where I ended up for the loss today for 280. again, I didn’t wait for my stop to hit. And the reason was if you look at this time right here around 9:45, 9:47, if you look at the spy, you’ll see that it started to really turn over and that that just killed the trade, right?

So here is where I liked the look of go to a five minute, the look of the spy because this is when I actually started buying KO, was on this candle right here. I was thinking, okay, well, we faded and we’ve put in a little bit of a short term bottom here. We’re starting to get bought back up. So right at this time, this is when KO started to cross that initial opening range high. And I figured, okay, well if we can get this by the hole, if for some reason it does reclaim view app start to reverse, it’s gonna push this KO. So it was a low risk trade because you did have the market in your favor at this point in time.

And as we started to progress further into the morning though, this is where I saw that we started to reject the view app and then you can see this next can we started to resolve lower. So the back test held and we started to fail. And when I saw this happening, that’s when I said, you know what? This KO is not going to work. It’s against the market. We were trying to get a reverse here on the market, didn’t get it so we have to get out of the trade. And I got out of the trade and the market has faded lower here thus far, but KO has held up, you know, held up through, through all that. It held up through all that and it just kind of a consolidated sideways and now the spy has reclaimed the the VWAP. And you can see we came right to this trend line, we stopped, right? That was the kind of the level that I was looking for that to sell it. You can see right to that, right to that trend line. I mean virtually to the penny that that trend line held. That’s why it’s really important, these shock values of the gaps are incredibly important to incorporate into your trend line analysis. They really do work well.

So anyway, that was a trade on KO. If it does get back above this line, the market does reverse, it does have another pocket, so you can watch that most likely up towards 56. But a small loss, small step back. That’s okay. A small price to pay for a trade. We’ll wait till another big one comes and we’ll become aggressive again. So any event guys, we’ll see everyone back here first thing tomorrow morning.

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