The Shakedown 9-13-20

LAST WEEK, S&P 500 (-2.48%)

Tuesday: -2.73%

Wednesday: +1.97%

Thursday: -1.74%

Friday: +0.05%

The market had another tough week with choppy action and some broad based selling. Once volatility hits, its natural for us to see wider ranges in the indices and much harsher moves higher and lower. The grind-up days of summer are undoubtedly behind us. We anticipated a difficult September and so far it’s just that, a big part of the game is tightening up your risk during the choppy, difficult times so you don’t give back all your coin from the easy days. 

Where will we bottom, is it in yet? No idea. Gun to my head I would anticipate we still have lower to go judging by Fridays action. The S&P and Nasdaq alike are sitting between massive inflection points and these are areas we need to watch to get clues of further direction. 

In the SPY the levels are the 330 area support and 343ish resistance. If we got a pullback to the 310 area I would start to think of getting more aggressive to the long side, as always we will see. For the QQQ's the big inflection point falls in this 266-270 support area as mapped out below. We've seen this trend in near-perfect tact the last few months, so for that to continue we would need to see that area hold up. Again, don't *think* it will hold up, but no crystal balls out here.

Personally I shrink my trading time frame heavily when we see volatility first strike and it’s helped me a lot. There are far from any A+ setups out there right now, especially after the environment we witnessed from March to August, so take no shame in sitting on your hands right now as stocks are under pressure, ESPECIALLY if you’re a pure swing trader. If you’re a more active trader, there is plenty of opportunities out there both long and short everyday. 

The key is having adequate game plans prepared and taking moves that stocks give you along with not being upset if the move goes further without you. I’m taking many 2-1 and 3-1 day trading winners completely off the table during times like this and we saw last week as most things that made the huge move higher early in the week, gave those gains back with the Thursday-Friday selling. This is trading between the weeds right now. 

A couple things to watch for this week are Apple's Event Tuesday 9/15 as they're set to debut a whole slew of new products as well as the highly anticipated Snowflake debut, ticker SNOW. SNOW is supposed to be a monster and Berkshire and Salesforce are both investing in the company pre-IPO. Warren Buffett isn't the type of investor to look to flip his pre-IPO shares on the day it debuts, so hopes are high in the long term for this stock.

Earnings This Week

Click the above picture for a full list of the companies reporting this week

TDG Long

Last week we saw major weakness across most sectors of the market, but we did see money rotate to the value stocks towards the end of the week and tech and high-beta names largely showed relative weakness. I am going to be watching if we see that same rotation early in the week, and if we do I would imagine this TDG continues to get some love.

This Aerospace and Defense stock has been flagging so nicely on the daily, all the while the market spent the week gyrating huge moves up and down. We want to see volume start to come in at the 510 mark to prove theres some big buyers in this thing. An intraday setup between 510-513 would be ideal. Wouldn't call this one an A+ setup though.

Trigger: $510-512

Stop: $486.89

Target: $580-600+

Click Below for this week's Watchlist

Hope to see you in the chat Monday!