Today the market took the bears and just dropped them on their heads. It was brutal. We have been pounding the table long for a few days now and I took the opportunity to cash most of my longs here today.
Alot of people (me included) thought AAPL would lay an egg. But they did pretty much the opposite. It was a good quarter by most measurements and their comps were really really tough to beat this quarter because they had a bunch of COVID demand from a year ago that was not going to be capable of replicating in a “normal” operating environment. They did was any company of their size and cash pile would do and authorized a massive buy back. It’s actually not a terrible place for them to be buying their own stock to be honest. Not too bad Tim Apple, not too bad at all. I was wrong on that call though, I wish I would have held my longs on TSLA and AAPL from a week and a half ago though - I had the setups there, I just didn’t have the patience. I’m working on that.
I will discuss a potential short setup here short term at the end of the note today.
Let’s look at the models and see what they say about today.
SPX Daily Trend Model = 75% Long, 75% Long Yesterday
75% of models long. New Highs Minus New Lows Model could go bullish next week, it’s already barely positive now - but I need it to get a little higher to trigger the model to go long. And the NDX model is only 50% long, so NDX is worse off here.
Daily Mean Reversion Models = 0% Long, 57% Long Yesterday
MMR has called the bottom here, so we’ll see if it is just a bounce or if it’s a major low or not. We didn’t get any more models today triggered today, but they all exited their longs.
Final Thoughts
It was a great week of trading this week. I am very happy, I killed it.
What I see early next week is a short opportunity for Monday. We gapped the QQQ up > 1.5% and not only that, but we held the gap and ran it up to 2+% by the close. That’s a big move up. We need to digest those gains.
In the past 20 years for QQQ it’s actually happened 79 times. The next day it’s up only 36.7% of the time and when it is, it only wins half as much as it loses when it loses. So, the risk is 1.78 to 1 to the downside with only a 36.5% chance of being higher Monday at the close. Those are objectively terrible odds. I will short a gap up in the futures on Sunday I think for a day trade on Monday. Taking profits is a good idea today. This shows various hold times and the results for the trades on average based on that condition I just outlined. It’s mostly red.
If we close on the lows Monday, then it will also cause a bunch of models to buy it again. So be ready for that. I mentioned that I was going to be very active trading for the next few weeks or so - it’s time to make hay folks.
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Disclaimer
This post is not financial advice, it’s made for educational and entertainment value/purpose. Trading is hard, investing is hard - there is substantial risk you could lose a lot of money. Any track record or performance shown here is purely historical and could change in the future - past performance is not a guarantee of future results. While the writer attempts to present information as truthfully as possible, author can’t be held responsible for any errors or omissions in the content of the posts and cannot be held responsible for how you use the information presented in the posts. Content here is property of You Got This Trading LLC unless stated otherwise. All rights reserved.