Here Are Strategies Rob Used To Have A Great Start To The Trading Week

Ok gang, welcome back. The things we talked about in the weekend videos sure came true today and made for some great trading in the Live Trading Room. I fired off some nice small lot trades for people to see how you can make money even as a small lot trader. Really great stuff. You’ll recall from the weekend that we mentioned if the Russell got down below here that the whole market was likely to find a greater push down. Sure enough, that’s what happened. As soon as the market opened us at 8:30 CT, 9:30 ET, it just tore to the downside. The thing is that as it tore to the downside, people were looking for an acceleration, even a little flash crash sort of thing. My reaction was that didn’t think this was true let’s take a look. This was right at 9:00 AM CT. What I pointed out for my students to take a look at. First, you can see my inventory retracement bar strategy in the back-drop here at a key support area. Then another key inventory retracement bar and to boot on the S&P, we have key long-term support. We also had key long term support on the Russell and numerous Inventory Retracement Bars in the back drop. Meanwhile, on the DOW was right near long term support. In fact, if we get down below that support on the DOW, we have potentially much lower lows coming in there. That is a key major long-term support. That is the last one that I have on the DOW actually. Beyond that, over on the NASDAQ, we also had multiple Inventory Retracement Bars, right in that zone and even down below there. My comment was that I think this is done at this point and we should be looking for retracements back to the upside. Sure enough, that was at 9:00 CT this morning and right after that we saw a nice “v” spike going into the remainder of the morning. Another great comment and training opportunity came out of that.

After that, I shared a strategy. Usually what we are looking for, with my channel trading for instance, s I am looking for a good steady move to the downside that pulls away in a nice stable format, ultimately works its way back up to the channel and the first touch back up to the channel gets rejected. But the thing is, wherein the grand scheme of things, this still has a huge opportunity for what I call  RTM (reversion to the mean) and come right back up here. And then when it gets back up there, we can’t necessarily trust the moving averages as they are coming down. They are much more likely to be broken because we’re really not over all in a major downtrend at that point, the backdrop was sideways and the short term retracements was different then the slow, steady, consistent retracement opportunity. That was a 9:42 this morning and sure enough, we got right up here and at 10 o’clock this morning I said “Listen gang, this is what I’m talking about, we had that sideways movement, now we had that rapid move down, I’m thinking it is going to break right through that areas.” Plus, we had buy signals on my work all the way back to right here, in fact that locked in the first 3 musketeers trade this morning. So we had buy signals, we’re in v spike mode getting back to that key resistance, and a lot of people wanted to short at that point. I said based on what I just told you, I think it is going to go through. That was at 10:00 this morning as you can see on the clock. Notice that right after that, a minute later, this thing started spiking right through. Then it continued to go on up here, as you’ll see. So, within 20 minutes, sure enough, we were way up here instead of at this point, just like we talked about. Really great stuff this morning, using this strategy and several more of these strategies to profit after this big move to the downside, profiting on the way back up here. It was a great way for the LTR students to do Live trades on the screen in front of them, profiting from this technique and then how the things we talked about earlier on in the morning, where we identified the bottom, where we identified the key support and resistance levels and how those things played out as we talked about them, even how we talked about them and 1 minute later they were right up here.

As we go into tomorrow, basically we are going to rinse cycle repeat. With a little time left on the day, we’ve got about 15 minute remaining on the session, we are going to use a similar strategy. All these are well off their lows going into tomorrow, so what we are going to be looking for here is what happens, once again, with the Russell.  Does the Russell stop here and start rolling back down putting everything back under pressure or do we try to short the little bit of support and actually drive back up. It is going to be a similar concept. Sunday, the email I sent you we used the bottom of the low here as the key break down point. Tomorrow it is going to be little but different because it is not that we are waiting to short until we get all the way down below these lows like we did in this morning’s session. Going into tomorrow we are going to be looking for fresh shorts if we stay down below the sped lines on all four of these charts. If the Russell stays above, then we are probably going to back off shorts. If everything starts to go back down, we will look for shorts, but we are going to be trailing stops a little bit tighter because this is another Inventory Retracement Bars in the midst of all of these retracement bars back here. So, that is another basis of support. Once it’s broken, that sends a very powerful message to me and Wall Street. But for now that is a major layer of support. So that means any shorting in this area from down below the speed lines could easily be reversed because institutions continue to hold on for dear life in that area. Instead of being so aggressive as we were, getting in there as small lot traders this morning, we’re going to approach a little slowly and make sure we keep those trailing stops in there so we don’t turn wins into a loss.

Great Stuff! Nice way to start the week.  Fantastic first day in the Live Trading Room for those who joined over the weekend and we did the big Q&A session that was fantastic. I’m really proud and really glad to have you guys with me. I look forward to seeing you in the Live Trading Room tomorrow morning or in tomorrow night’s video. Take care.

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