There are two approaches to trades:
We’ll get to our regular weekly sector analysis in a moment. But here it is in action today. In prior weeks we’ve noted distinct weakness in the basic materials sector, represented by the XLB etf. We said we were looking for a short-term, lower timeframe recovery in the sector to bring XLB up to a price-level where we expect the bigger picture downtrend to resume. The stage for that was set last week with a modest rally in the XLB, which brought the etf up to a region of expected downward price pressure, a short setup we shared with you. Here are the “before” and “after” slides.
Yesterday, Aug 2, price popped up to the lower, yellow highlighted region in the above chart, and immediately began to fall. We decided “to express” the trade by buying XLB puts as opposed to simply shorting XLB shares. The interim results of the trade using both instruments are shown in the chart below:
Here’s today's sector rundown, starting with Sector Performance charts summarizing the last trading week (chart 1), followed by a screen of sector performance based on the behavior of short-, medium- & long-term moving averages (chart 2). These help us find trend-following, high probability setups, like what’s shown with XLB above and our GRMN trade which we summarized a couple weeks ago.
In Chart 2 below, the moving average performance screen shows the state of the 20-, 50- and 200-day SMAs in each sector and how price sits in relation to each SMA. Week-to-week changes in SMA status are highlighted (for the close of 7/30 vs close of 7/23).
After all, a tool is only as good as your ability to use it.
I have handed you some valuable information
Now let me show you how to use it.
You see, information is good… but ACTION is better.
After working with thousands of experienced traders and want-to-be traders, in all kinds of market conditions, over the past seven years, I have found that the best way I can help you get immediate and tangible results is with our Show Me The Money Call.
It’s where you hop on a live, 17 minute Zoom call with me where I will share my screen and take you through our exact process to determine and execute a winning trade right there on the live call, including the precise exit points of the trade.
No more guessing on your own whether something will work or not….
We do all the heavy lifting and provide you with the exact steps you’ll need to make so you can start seeing results immediately.
You can choose to make this trade yourself, or make it in a simulated trading account, or just sit back and enjoy watching how we come out ahead of the game, day in, day out, week in, week out, year in, year out…
Book your Show Me The Money Call Here
See you there,