Rob’s Thoughts On Swing Trading, Options Trading, and Stock Index Futures

Okay gang, welcome back! Let’s go ahead and take a look at a couple of different markets. Let’s start with the ones we’re going to avoid going into tomorrow at this point.

1. We’ll be looking to avoid the Euro. Today I wanted to avoid it because we had a big wide range bar so we were looking for a consolidation. The consolidation played out. I want to avoid it going into tomorrow and Friday more or less because we’ve got a lot of economic data coming out for the Euro all throughout the evening into the morning. That can make for a volatile ride with that many kind of news releases that you basically trade in the middle of the news and that’s not a good place to be for the average retail trader.

2. Gold is still sitting here in my affectionately coined term of gobbily gook.

3. Crude Oil, same thing. Right in the middle of all the gobbily gook. A bunch of support levels, resistance levels, and a bunch of levels rolling right through the middle of it. It’s high risk, low probability stuff whipping back and forth there.

What I do want to focus on is as such, let’s go ahead and start with the Stock Index Futures.

Stock Index Futures Talk

Looking at the Stock Index Futures the Russell is still very much a culprit here. We’ve got the kill zone in that gobbily gook range because we have a lot of support and resistance coming down on top of us, rising underneath us and then driving right through the heart of us here. That you can see now two days in a row we’ve hit that area that I warned about yesterday and we continue to struggle in those areas. In fact, like I said the trading I focused on today was short side trading. Made for a profitable day but none the less its tough money earned right now in the middle of this until we get out.

The NASDAQ performed very well today but we still have a negative divergence coming out of this here right now. As we take a look at this going into tomorrow, in fact let’s just pull up all of the charts here, the thing to watch is this… the DOW and the Russell are not performing very well here. We have a second distribution bar and on the Russell and you look and see we also have a distribution bar now on the DOW here as well. They’re both struggling trying to break out. The NASDAQ has been able to perform well because of NETFLIX, APPLE and others but we’re not getting that same love and that same support out of the DOW & Russell.

With these distribution bars here, going into tomorrow, I’m going to see if this is going to roll over. We’ve locked in kind of after a Hoffman Fade Stochastic Spike Double Self-pattern now we have a Hockey Stick to boot so you kind of have three sell signals there going into tomorrow. Typically in a situation like that I’m looking for a pullback. Right here even on the S&P struggling at yesterday’s distribution bar is where we’re looking to close up right now with five minutes left in the S&P trading session here. We’re already ten minutes after the US stock market close, we’re right there at that distribution bar from yesterday. To recap, while the NASDAQ took off today on an earnings related stint we’re still in a negative divergence on the NASDAQ. The DOW failed to gain any traction, Russell to gain any traction and the S&P, all of them either had distribution bars and or stopped at yesterday’s distribution bars.

I’m going to be watching, going into tomorrow, what should happen is that the market should pull down tomorrow. If the market does pull down I’ll be looking for shorts, if it doesn’t do what It’s supposed to do, which is sell off, so the sells don’t sell and we start charging to the upside then I definitely will be jumping on some long side trades because that’s a signal itself when the sells don’t sell. Especially when you have three of them on all four of the Stock Index Futures. Again, we’ve got these triple sell signals here with what we call the Hoffman fade, it’s also extended stochastic spike and then with the hockey stick sell. So we have triple sell on these indicators, which should come down. Either way is going to be a powerful signal for me so the Stock Index Futures are going to be very much on my watch list tomorrow.

As we take a look at APPLE, APPLE here continues from my perspective to be very bullish. I’ve seen a lot of articles come out as recently as June 30th talking about how APPLE was “crashing” and that was the quote there in the news media, that it was a “pump and dump”. Since that level we’ve gone ahead and continued to make higher highs. Just to give you my thoughts, it’s the same thoughts I’ve shared with you gang here on the Nightly Videos since way back here when I was selling puts. I was telling you guys between the Free Videos and the Swing Trading Videos here in particular how I was going to be selling puts here on APPLE before the split. From my perspective, listen, if you liked it at 500/600 dollars you gotta love it here when it’s sitting here under 100. What I’ve been telling you, the theme here is this, mom and pops who couldn’t afford more than a few shares of this thing at best at 600 dollars are now able to accumulate a lot more of it than they could before. It makes it much more affordable and yet the fundamentals are more or less the same. This is a great opportunity for people who couldn’t do a whole lot with it up here to do a lot more with it down here. You’ll notice that we’re holding my trends very well here as well. Every time we’re coming back to the rising support we’re taking back off there. From my perspective, while we may be due for some pull backs the overall analysis is still very bullish for the bigger picture here based on the same things that I shared with you back over here. If you heeded those words back then that would have been a good thing.

Bonds, I was asked by one of our viewers today “Hey Rob, what about buying the Bonds now?” Well the thing is, the viewer went ahead and sited the buy signals we had coming in over here if we could break out above the high from the other day with the distribution. The problem is twofold. Number one, that viewer failed to realize that we have a big distribution bar right in the backdrop here. So, that’s a big issue first of all. We really have to get above that and then our target is still initially up here to the 140 level. Second of all, the real entry if you recall was back down over here. I’ve been sharing this set up with you over and over again all year long.

You remember, throughout the year we were looking at the Bonds here looking for a pull back. Break through resistance, pull back to resistance and then I said we have to start taking back off and close above the speed lines. Month after month that’s what we looked for, month after month and we just couldn’t get it to happen here. Month after month we were looking for the breakthrough, the pullback to and then take off but instead it kept pulling right back down hard until finally it broke through, pulled back and then closed back at the speed lines. At that time I told you, “Okay, there’s the buy signal from my perspective from my trading and as long as it stays above the blue line here it’s still buy signal.” That causes to raise up here to the next target. Then we went ahead and pushed through, pulled back, tried to close above the speed lines but we couldn’t. Not until we got over here then we closed above the speed lines and then it had a shoot up. As we go forward here, then we tried to get above, we couldn’t do it. We pulled back through but then right over here we did pull through, pulled back, got back up there and closed above the speed lines and that lead to the next move. The point is the real entry opportunity from my perspective were here, here and then of course this one that I shared with you way back over here in the videos as well which was right here.

So we talked about those, go back and watch the videos, you’ll see more about that. I get a little nervous when people want to buy now when we’re already 50% 2/3 of the way up here and we’ve got massive distribution and resistance in the backdrop there. You have that big inventory retracement bar right there that’s holding us down even as I speak.

I hope that helps the viewer that asked the question and then for all of you to learn from it as well. Those are some of the key things I’m looking at into tomorrow morning, let’s see if we can have some more fun with those Stock Index Futures and the market as a whole. We have a lot of great things coming, it’s going to be a great second half of the year and I’m so glad you guys are here with me. Have a wonderful evening gang, well see you tomorrow in the Live Trading Room or in tomorrow night’s videos, take care everyone!

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