Menu
Jani Ziedins (pronounced Ya-nee) is a full-time investor and financial analyst that has successfully traded stocks and options for nearly three decades. He has an undergraduate engineering degree from the Colorado School of Mines and two graduate business degrees from the University of Colorado Denver. His prior professional experience includes engineering at Fortune 500 companies, small business consulting, and managing investment real estate. He is now fortunate enough to trade full-time from home, affording him the luxury of spending extra time with his wife and two children.
By Jani Ziedins | End of Day Analysis
Free After-Hours Analysis:
Wednesday was the first real good session for the S&P 500 in nearly three weeks. The index arrested a nearly two-week-old slide, bouncing nicely off of the 50dma and adding 0.85%
Is this the real bounce, or just a false bottom on our way lower? Unfortunately, only time will tell and we won’t know the answer until long after this trading opportunity passed us by. Sometimes the first bounce is the real deal, but often it takes two or three false starts before turning for good and Wednesday was only the first attempt.
But just because we don’t know if this is the real bounce or not doesn’t mean we cannot trade this move intelligently. When I have no idea if this is the real bounce or not, I trade it as the real thing until proven otherwise.
Reclaiming 4,460 this afternoon was a nice entry point and closing above 4,480 gave us another entry. As for stops, hold above Tuesday’s lows near 4,350 and everything looks good. Fall under this key support level and all bets are off. Easy as that.
I have no idea if this bounce is the real bounce, but I have a plan and I’m trading it. And if this isn’t the real bounce and the slide continues, no big deal. I simply get out and buy the next bounce. In fact, the lower this goes over the near-term, the better it is for me because the larger discounts give me more profit opportunities during the subsequent rebound. That makes this is one of those times I hope I’m wrong.
As always, start small, get in early, keep a nearby stop, and only add to a position that is working. If the market rallies Thursday, move stops up to our entry points, giving us a free trade.
If you find these posts useful, please return the favor by liking and sharing them!
Sign up for FREE Email Alerts to get profitable insights like these delivered to your inbox every evening.
What’s a good trade worth to you?
How about avoiding a loss?
For less than $1/day, receive actionable analysis and a trading plan every day during market hours
Follow Jani on Twitter @crackedmarket
By Jani Ziedins | End of Day Analysis
Free After-Hours Analysis:
Friday makes it five down days in a row for the S&P 500.
That’s the longest stretch of down days since February. And for those that care about these things, the last time the index fell five days in a row, it ended up falling another 4% before finally finding a bottom. If history repeats itself, we could see the index fall another 200 points over the next week or two. As I said, this only matters to people that care about these things, so please feel free to disregard this if it isn’t relevant to you.
As I warned readers on Thursday:
Well, Friday’s pathetic price action confirmed this time is different and that means we haven’t seen the worst of this dip yet.
Unfortunately in trading, we have to make our moves before we have all of the information. Often that means pulling the plug days before something is obvious. Anyone still waiting for confirmation on Monday or Tuesday will be selling long after the damage has been done. By that point, why bother selling at all?
Smart traders buy early and they sell early. Suckers buy late and sell late. Please don’t be a sucker.
For those that have been paying attention, we moved to cash Thursday and waiting for that next buyable entry point. Odds are good stocks will bounce on Monday. But most likely that will be a fool’s bounce and lower lows are still ahead of us.
There is nothing wrong with buying Monday’s bounce if we are smart about it (start small, get in early, keep a nearby stop, and only add to a trade that is working). But odds are good Monday’s bounce will turn out to be a false bottom and we need to be nimble if we buy it. Most likely the selling will resume later next week before we finally carving out a more painful capitulation bottom.
But if we are savvy and nimble, we buy all of the bounces because we know we can get out when those false bottoms fizzle and start making fresh lows.
I have no idea if the first, second, third, or fourth bounce will turn out to be the real bounce. That’s why I buy all of them and then I don’t have to worry about it. (again, start small, get in early, keep a nearby stop, and only add to a trade that is working)
While some people hate volatility, I love it because that’s the fastest and easiest way to make money.
If you find these posts useful, please return the favor by liking and sharing them!
Sign up for FREE Email Alerts to get profitable insights like these delivered to your inbox every evening.
What’s a good trade worth to you?
How about avoiding a loss?
For less than $1/day, receive actionable analysis and a trading plan every day during market hours
Follow Jani on Twitter @crackedmarket
By Jani Ziedins | End of Day Analysis
Free After-Hours Analysis:
It’s been a rough week for the S&P 500 as Thursday’s 0.5% loss makes this four down days in a row.
Monday was Labor Day, making this unofficial start of the fall trading season. It’s been a nice and easy summer and a trend is far more likely to continue than reverse, but if the market’s mood is going to change, this transition in seasons is a good time for it to happen.
There isn’t a quantifiable reason to claim this rally is running out of gas and this week’s dip is different than all of the other failed dips this year. But just knowing where we are and where we’ve come from, it feels like this time could be different.
As I often write, how we finish is far more important than how we start and by that measure, Thursday’s was an ugly day. Early gains evaporated and the index crashed through 4,510 and 4,500 support on its way to closing near Wednesday’s lows.
I don’t mind red days that finish well above the early lows. In most instances those are bullish signals. But there was nothing bullish about Thursday’s retreat and close at the daily lows.
I had my stops spread across the upper 4,400s and lower 4,500s and Thursday’s pathetic price action squeezed me out. Most likely this week’s stumble will turn out to be nothing more than yet another buyable dip. But for me, it’s been a nice run and that makes this a good time to lock-in some profits.
If the index bounces back above 4,500 on Friday or sometime next week, I’m more than happy to get back in. But as long as it remains under 4,500, I’m more than content watching this from the sidelines.
If you find these posts useful, please return the favor by liking and sharing them!
Sign up for FREE Email Alerts to get profitable insights like these delivered to your inbox every evening.
What’s a good trade worth to you?
How about avoiding a loss?
For less than $1/day, receive actionable analysis and a trading plan every day during market hours
Follow Jani on Twitter @crackedmarket
By Jani Ziedins | End of Day Analysis
Free After-Hours Analysis:
The S&P 500 lost 0.34% on the first day back from the long holiday weekend. But more importantly, the index remains well above the psychologically significant 4,500 level.
Tuesday’s early selling found support near 4,510 and now that becomes our new canary in the coalmine. Anything above this level and all is fine and dandy. Slip under this level and we need to watch the price action with a more critical eye.
As we have seen all year, it is really hard for any dip to get started when so few owners are interested in selling. As much as conventional warns us about complacent markets, the critics always forget to mention just how long complacency lasts before the collapse.
I have no idea how much longer this rally can keep going, but at this point, it is not showing any signs of letting up. As much as I question the sustainability of this one-way strength, there is nothing to do other than follow the market’s lead. Until something changes, we operate under the assumption nothing has changed.
Near-term support is setting up near 4,510. Keep holding for higher prices as long as the index remains above this level. Slip under 4,510 and it makes sense to start peeling some positions off proactively. But like every other time we sell in an uptrend, we always turn around and start looking for the next buyable bounce, even if it happens a few hours later.
Remember, just because we harvest some profits proactively doesn’t mean we have to give up on a trade. As soon as this starts going up again, we need to be back in.
Tuesday was an ugly day for Bitcoin. The cryptocurrency floated above $52k this weekend ahead of El Salvador’s adoption of Bitcoin as a national currency. Unfortunately, the rollout was glitchy and that caused the cryptocurrency to tumble more than 10%.
Anyone that’s been trading for a while understands “buy the rumor, sell the news”. Is this what we are seeing in Bitcoin? It is certainly starting that way. As long as this remains under $50k, we have to be careful.
It makes sense to take some profits off the table and wait to buy back in after this reclaims $50k.
Buy low and sell high. Even bulls should be wishing for a larger pullback here so they can buy more at lower prices.
If you find these posts useful, please return the favor by liking and sharing them!
Sign up for FREE Email Alerts to get profitable insights like these delivered to your inbox every evening.
What’s a good trade worth to you?
How about avoiding a loss?
For less than $1/day, receive actionable analysis and a trading plan every day during market hours
Follow Jani on Twitter @crackedmarket
You must be logged in to post a comment.