Geez. I’m dyin’ here. The temp has dropped 40 degrees since lunch. My cat met me at the door and said “meow?,” which, translated, meant “Dude, WTF??“. Tonight I could really use a cup of warm apple cider with just about that much Jim Beam stirred in.
Ok, November’s over. EOM markups, if there were any left, are done. Let’s get ready for activity to pick back up.
Also, something I’ve neglected to point out thus far- the action in the VIX. I had a post back waaay back in January talking about the VIX Fade Trade. Well, you’ll note on the chart below that on Monday the VIX hit 12.33, or about 15% above its 10sma:
As usual, the rubber band has snapped back, and we’re back to a point in the middle of the median of the average, where the market can comfortably surge in either direction as far as Uncle Vix is concerned.
Apple is set up for a nice trade. Here’s a chart of the rangebound action of the last five days:
We could trade a break of this range in either direction. Me, I’d prefer down because as you know (or in case you didn’t know), it is my destiny to short AAPL. Long uptrends in Apple aren’t money-making opportunities for me; they’re pauses between short sales. It’s not logical, it can be downright crazy, but like the Queen and her Skoal, it’s my own little indulgence, with proper management it costs me virtually nothing (and one day will make me the King Of The World HA!), and I long ago stopped trying to make sense of it.
The dollar broke (weaker) from its little pullback I mentioned yesterday, and of course, so did gold. Unfortunately, gold and [
insert name of your favorite gold stock here] gapped up and didn’t give us a clean entry:
What to do? If tomorrow opens inside today’s range (63.90-64.43), then walks through the top of it, I wouldn’t at all mind going long at 64.44 with an initial stop of 63.89, for an initial risk (tah-dah! “R“) of 55 cents per share, with a position size chosen accordingly, based on how much I’m comfortable losing.
To the Qs!
It’s been a while since I’ve followed an ongoing swing trade day- to- day. I forgot how much fun it is. All that sh*t that looks so clear and certain in hindsight can cause some butterflies as it’s unfolding, can’t it?
The Qs printed a little doji with (just barely) the narrowest range of the 3-day “up” move:
If I had no position, I’d see this as a prime trade setup:
If it opens within today’s range and heads down through today’s low, I’d use it as a pullback- into- a- downtrend shorting opportunity, with a stop either at 1) the top of today’s bar if I were feeling aggressive (usually am) or 2) the top of the recent uptrend (44.86), with a correspondingly smaller position size based on risk (less aggressive, wider stops, looking for longer-term gains… the “sensible” alternative)
If it opens within today’s range and heads up, I’d let it be. Wait for a break of 44.86, maybe a little thrust- and- pullback action, then get long.
If it gaps in either direction, we’re in daytrade territory, with a possible swing trade entry to boot, depending on the action.
However, I do have a dog in this race and a horse in this fight. I’m short with a stop of 44.62. That stop will not move, as today’s low was a higher low, and I don’t move short stops on higher lows. Second basemen either.
What I will do is quite simple: 1) get stopped out or 2) add to my position on a break of today’s low with a simultaneous lowering of my stop for the overall trade to keep my risk constant. I fully expect to have this dilemma resolved within the next couple of days, most likely tomorrow.
Cheers. Where’s the blanket?