Before we take a look ahead, let's do a quick recap of last week. I posted the following in our chat (check out the time stamps). We were looking at completing a move barely higher on Monday and expecting a pull back. During the pull back, I personally did not get short any option positions (just futures) but I did see the pull back as a buying opportunity. I alerted call positions in COST, BA, ADSK and even TSLA for a short term play higher. We also took profit on WTW this week. Check out my last blog post anatomy-of-a-trade.html
Show me your fibs!
Knowing your Fibonacci levels and knowing which are support and resistance levels are key to your trading. I always start with the indices to find a direction in the market. Once I can figure out a direction (usually on Monday) I can plan my week accordingly and know how 1. I can balance my portfolio or 2. what trades I want to take depending on market conditions. Right now the market is only giving us an opportunity for shorter term trades. I've been finding several on smaller time frames meaning the trades are only lasting over night or 2-3 days max. Personally this isn't my style but we have to adapt to what the market gives us. If you're not a fan of day trading or you are a day trader, you need to approach the market something like this. If I could only make 1-2 trades this week, what are the best set-ups that are no brainers? Where would I put my capital to work for me for this 1 or 2 trades this week. I like to post usually on Monday afternoons the trade of the week. If i'm only given one shot or were allowed to only place one trade, what would it be. Stay away from the Twitter pros and news gurus and do your own analysis.
What's the plan?
I'm going to post several charts below starting with the Nasdaq and S&P 500 futures. Pay attention to the time frames on the charts (hint, this is the chart I use to enter the trade or plan to enter the trade) and the various number levels on the right to decide for yourself what you think are potential trades. For our members, you'll get a full video analysis of the weekly outlook later this evening. The link will be posted in our King-Chat and in the members blog section. We have a limited time to receive a free trial in our chat room. For details CLICK HERE. No credit card required.
Chart work is my artwork
First, I want to invite anyone new to our King's Chat room. Through March 31, 2018, it is on sell for $497. Price will never be reduced again and will be $997 moving forward. Click here to join today!
With volatility back and some big ranges we've been seeing some great moves in futures at the open, futures for swings and short term option trades. The great thing about this market is we can play it both sides and our community of traders capitalize on this whether it be through futures or options.
Where is the S&P 500 now and where is it going?
We can see below that the opening tick trade worked again this week and we initially had a move down back into the cluster of fibs we've found on a larger time frame. Once we got the bounce after the initial trade you can see we had a 15 minute squeeze along with a EMA crossover that triggered us long into yesterday's high.
Once we got to yesterday's high, we sort of stalled and you can see in the photo below, on a 30 minute time frame this consolidation set up another squeeze. The process repeats itself and you can see indicated by the arrow that we had another EMA crossover to trigger us long into the end of the day. So three trades on the S&P 500 futures on the day. Opening fade gave us 8 points, 15 minute gave us 6 points and 30 minute chart gave us another 10-12 points depending on your trailing stop. Overall 25 or so points on the S&P futures and that's equivalent to $1250 on one contract! The various squeezes that took place were pointed out by other members in the community. Being able to work together like this helps us maximize our profit each day!
Where does the S&P 500 go from here? I think we saw some short coverings on Thursday, end of quarter quotas being met by the big boys in fancy suits in the high rise towers and we saw a nice rally. I'm looking for a bounce higher after the long weekend but we need to be able to find some resistance areas so we don't get trapped into thinking the low is in and we can only go higher.
Looking at the chart below we see a nice cluster of fibs around the 2700 area then again 2722, 2743 and 2760. We also tagged the 8 day EMA and couldn't get above it. While I'd rather use fibs for my support and resistance levels, you can also see the clump of EMA's at the 2700 level. A bounce there or even to 2720-2725 area would not surprise me. Any longs I have I'll cover there including the 10 SPY positions that I took after the market close on Thursday.
Let's take a quick look at a couple stocks that may be in play if we see a bounce. Again short term as we still have some hurdles to the upside to clear as well as the downside.
Facebook $FB: Here we completed a bearish price extension down and looked for a move higher. We played this short term for a bounce higher this week. The bigger picture shows a tag of the 8 EMA and near our first target but let's see if we can get $163-$167 on an up move with the S&P 500. RSI is low as well and you can see the arrow indicating we have come out of the oversold territory.
Netflix $NFLX: Another price extension target met to the short side along with longer term support levels making Netflix a great candidate for a bounce as well. We entered into this position using our pre-earnings strategy that has a 7 win 1 loss over the last two years! Looking at a 400% return on this particular trade. We took some heat and some add to the position but I'll be waiting for this setup that has a 593% return to add to the position. If you don't have a clue what we are talking about then we have a dedicate EARNINGS chat room that shows all empirical back testing on any earnings trades we take. For now $300-$305 is ideal on NFLX as an upside target but as we enter into earnings, we are looking to take advantage of implied volatility and a slower rate of theta decay. We have an aim signal forming while RSI is neither overbought or oversold.
Plenty more to come in our members blog but overall, let's see if we bounce early in the week and what the beginning of April has in store for us. Our King's Chat remains on sale until March 31 for $497 for 12 month access. Starting April 1 the price rises to $997 a year. We closed the first quarter of 2018 out with a gain of $19,000 in our signals room that all members have access to. I'll have a meeting with a group in NYC this weeken regarding exciting things coming to FibKing Trading then heading to the beach next week but will be around at the open each day. Our community of traders will be around to and trading as well. Enjoy your weekend, Happy Easter! Matthew 28:6