This seems to be the unspoken question among the new traders and when no one asks, no one uses a plan. There seems to be no problem asking the more experienced traders questions like "where should I have a stop loss?" or "would you be entering here?" or "what are you going to do if 'xyz' happens?" All of these questions are asking "what is your trade plan?" in disguise. I notice that when traders are asking questions similar to these and they don't like the answer they get, they go ask someone else in hopes that their plan falls in line with what they want to do. Why go through all this trouble when it isn't going to lead to successful trading anyway? Because it makes people feel good about them trading with a lack of knowledge of their own style and tolerance. Sorry if that is harsh but it's the truth. It is OK to not trade while you are still learning the business, that is how I survived.
For about the past four weeks the theme has remained unchanged, buy the stronger names with good setups and they perform well. Fairly straightforward market conditions, yet people still refuse to believe it and continue to fight it. I can understand that the market is getting extended and it will pull back at some point; but let the market dictate when and don't start trading out of frustration, also known as emotion. With that said there were a lot of strong stocks with potential breakouts that buyers started backing off of towards the end of the week and put in a lower low. In these situations I will be watching for where the next high takes place, whether it is lower or higher and that will dictate how I trade them. There are also a lot of stocks that have made huge moves and are now hitting resistance, these stocks have used up their rocket fuel for now and likely need a rest whether through price or time. This will naturally result in less setups taking place in my universe of around 250 stocks.
I consider this post to be a public service announcement for all thinkorswim users out there. I switched over from E-Trade to TD Ameritrade about two years ago (although they weren't always my primary platform) and ever since I have had nothing but problems with ToS, namely their inability to plot price quotes onto a chart (which is what I consider to be the fundamental, most basic part of a trading platform). If you feel the same, luckily you have come to the right place for a solution to your vulgar experience with thinkorswim charting.
This week was pretty routine as far as the broader indices go as they continue to climb a wall of worry. There were some big trades including TSLA, MYL, WDAY, etc. Friday got a lot of people rethinking their complacency as a high volume sell off took place in the S&Ps because of Ukraine. The S&P actually ended up closing with a green bar and continues to make higher highs and higher lows above a rising 10 day average. I don't know what else the skeptics can ask for to get long a few of these strong names and define the risk below a previous low. The trend is still upward.
No real surprises this week as the S&P consolidated and distributed at the all time high resistance. This market is really split in two right now, either you are a stock that is just blasting off to the upside or you are being ignored. There are so many names out there getting crazy amount of momentum for reasons I have no idea. I can understand the Teslas and the Facebooks but names like CBS and Hershey's I just don't get it, but that is the market we are in. Biotech, utilities, semiconductors, and gold is where the money is flowing right now. Real estate is also getting some attention as it tries to form a bottom.