Newsletter - 6/11/2023
Happy Sunday! I hope you have had a great weekend and are ready for the first full week of Summer trading. Maybe this week we get a direction that is not just up?
PREVIOUS WEEK MARKET:
The market effectively moved sideways this week. While we did get a strong intraday down move in the QQQs on Wednesday, the weekly range was effectively flat.
HOWEVER - we did get a confirmed reversal on the daily on the QQQs. Wednesday's price closed below Tuesday's low - a High Close Doji or HCD - one of my best and strongest setups. Now, in order for the HCD to be nullified, price must close above Tuesday's high.
Remember that on HCD, there are three components:
1. The TRIGGER candle, which is the candle with the highest high. That would be Tuesday.
2. The CONFIRMATION candle, which is the candle following the TRIGGER candle and must close below the TRIGGER candle low. This candle can happen within three time periods, the shorter the stronger. That would be Wednesday's candle.
3. The ENTRY candle, the candle immediately following the CONFIRMATION candle, which would be Thursday's candle.
I have added the OIL chart because thats the inflation / manipulation signal as you know. Even with the Saudis announcing a cut of 1mil barrels per day it was not enough to overcome the Biden admin monkey hammering.
Let's take a look at some charts:
SPY opened the week at 428.28 and closed at 429.9
ECONOMIC COMMENTARY:
Boring week will be replaced this week by "big" economic news.
1. FOMC on the 13-14th - I am expecting a PAUSE and then two hikes by the end of the year. This event increases risk which I will comment on below.
The market is as usual hyper focused on it - whatever. I mean its important news but the FED has already signaled what they are going to do in repeated news conferences.
CLOSED TRADES THIS WEEK:
We had a great week due to our Lottery Earnings plays. This won't happen every week so review with some context. Closed trades this week were:
AI: -65%; 5 day hold
CVGW: +100%; 1 day hold
UNFI: +883%; 1 day hold
SMTC: still in it and down 33%.
I have started to track the total net gains as a model 5k portfolio. But even with the losses this week, the total value of the 5k model went up 37% from $6083 to $7979.
To view the 5k portfolio go here.
BLOG POSTS:
In case you missed them, I posted the following market commentary this week also:
UPCOMING WEEK:
The larger events this week are QUAD WITCHING. Here is what happens on Quad Witching days, which happen four times this year, always on a Friday. This Friday, the 16th, the following occurs:
1. Stock index futures contracts expire. /ES, /NQ etc.
2. Single stock options expire.
3. Options on stock-index futures expire.
4. Stock index options expire.
The net effect SOMETIMES is that there is a lot of volatility because a LOT of money is being repositionsed into the new contracts of each. Sometimes the market will sell off or rise because maybe an institution was heavily long and then decides to lower their long risk so they purchase less long contracts. Or the opposite can happen. Many try to trade this but I see NO predictive value until after all the trades are done in each of the above four contracts. This is a simple explanation but as you know, I keep things simple unless there is an advantage to being more complicated.
I will leave you with this: all the predictions of market turmoil are just that: predictions. No one knows whats going to happen and even if they did, they would not know what all of the other market participants are doing.
I do not scalp /ES on this day or during the FOMC announcement. Way too much program trading goinf on.
Quad Witching does mean that I MIGHT be taking profits on a couple of call positions depending on what I am seeing in terms of price action etc. I know I just said that I don't believe anyone can truly predict what the net effect will be of QW but I do know, risk rises into the event. Therefore, depending on the individual stock, I might take profits with a plan to get back in after QW.
SPY: Nothing has changed since last week: next target is 431.68 UNLESS we get a confirmed reversal on the daily chart.
NOTHING says get short yet.
As I mentioned above, the QQQs are still in a cofirmed reversal on the daily. I will be watching closely to see if it reverses. So far, the Bears are doing a crappy job.
I am not looking to get short yet. BUT:
Oil is not going anywhere until Biden wants it to. The Saudis have been largely ineffective.
WHAT I AM LOOKING AT:
I've got a new Core Trade I am working on as well as a deep dive into a FinTech company.
I am watching our TSLA and ORCL plays closely and will decide if I take profits. The Washington Post just published a hit piece today about TSLA autodriving killing people. I will be curious to see what happens on Monday but yes, I do think it was a planned report meant to give "someone" a better buy in price.
I also will continue to search for opportunistic trades and share them with Members.
CLOSING COMMENTS:
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Hey, if there are phrases or words I use that don't make sense, put them up here in the comments.
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If there are any stocks or investments you want me to look at, send the to me at info@MrNotAdvice.com. I will answer them in next week's newsletter.
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Don't forget the Discord live chat is always open and free: Discord - come and join us!
Thanks and let's have a great week!
theBoss
CHANGES COMING:
In the next couple of weeks, I will be shutting off Free access to Discord and some of the website. I have always been transparent about monetizing traffic and now is the time to start.
I am mulling over how I will do this BUT THOSE OF YOU THAT ARE DISCORD MEMBERS BEFORE THE CHANGE WILL NEVER PAY FOR DISCORD. At lot of ideas and lessons are held in Discord so if you have not joined the server, I encourage you to do so quickly. Also, invite your friends before it gets locked down.
Nothing above is investment advice nor should it be construed as investment advice. It is offerred for entertainment purposes only. Always consult your advisors before investing any money. Do not "follow" or "mirror" any trade ideas provided. Mr.NotAdvice is not a licensed or registered investment advisor. Do your own research.