Special Weekend Edition
“One machine can do the work of fifty ordinary men. No machine can do the work of one extraordinary man.”
I’m typing this up on the porch of a big ol’ farmhouse on the Finger Lakes in New York.
... ah the freedom of remote “work.”
Be jealous.
(actually, don’t be jealous. Make your own dreams and then find a way to make them happen.)
Anyway, today’s quote reminded me of one of the weird tips I learned about the reality of trading in the age of computer algorithms.
See, back when I was cutting my teeth on the charts, I learned a lot about support and resistance lines. About using them to know if a trade idea was working out or if it was breaking down and I needed to exit early.
What happens is traders use these lines to create stops so that if the support / resistance doesn’t hold then they get out.
But what that actually does is give the market easy targets for easy money.
The computers see all these orders floating out there and they move the price action to scoop it all up. Then take off with the original idea, leaving the trader to say, “if only I hadn’t sold there and just held through.”
If you’re watching candles, you can usually see this with the wick puncturing through the support like a needle and then climbing back higher.
Personally, I don’t use stop orders.
Instead, I just follow my plan and make adjustments if I have to.
No panic exits.
Just easy trading.
The kind of trading that lets me sit on a porch by a lake, sip some coffee, and enjoy life.
NOTE: The markets are closed Monday for Labor Day. I’m traveling on Tuesday, so there won’t be a newsletter then either. Things will be back to normal on Wednesday.
Index Snapshot
See the Legend in the footer below
What does “last Friday of August before Labor Day holiday” spell? … red day in the markets. We closed down, but not surprising. Bitcoin continues to drift lower. Might find support around $102k or so. Buckle your seatbelt, it might be a bumpy ride.
Nasdaq pulled back quite a bit … still reeling from NVDA earnings, but probably a good opportunity on Tuesday to sell puts for good premium and strikes.
Fear and Greed Index
We are exactly where we were two weeks ago. The market is in chop mode which is perfect for our trading framework.
Today’s Macro Headlines (Source: Yahoo Finance)
The administration's move to take stakes in companies across industries may soon have a new target.
Yahoo Finance
Why it matters …
I’m not sure where this “government gets a stake in large companies” narrative will go. I suspect it will get challenged and blocked by the courts eventually. However, we play the hand we are dealt and this article indicates that Nuclear Energy stocks will benefit from the next foray. Think OKLO, UUUU, etc.
Report on Friday’s Expired Real Trades & Sample Trade Ideas
Real Trade Spotlight (Free subscribers):
One real trade collecting $157 of premium for single contract trades. Average Return on Risk (ROR) = 1.52% for this week.
Sample Trade Ideas Spotlight (Free subscribers):
Average Return on Risk (ROR) = 1.48% for this week.
Sample Returns = $274 for single contract trades -- that could cover over 1 year of a Premium subscription, if someone took all of those trade ideas.
...
Because it’s Saturday, Premium subscribers get the Special Weekend Edition, including:
Upcoming earnings to watch out for this week
(there’s still a lot with quarterly earnings season winding down)A look at next week’s bullish/bearish tendencies
Spotlight on the Indexes
UH-OH! I think you're missing the best part...
Only Premium subscribers get access to the rest of this post including today's exclusive Stock Spotlight Sample Trade idea. It's only $21.87 per month.
Upgrade to PremiumPremium subscribers get access to exclusive content including...:
- A look at real trades I've taken
- Sample trade ideas for you to consider
- Deeper dives on relevant stocks & ETFs
- Upcoming earnings to watch out for
- Next week's market predictions
- and more...