Thursday, June 21, 2012

Thursday Evening


Thursday Afternoon

S&P futures bears stepped in right off the cash open at the 1352 level... and have pushed it down about 20 points. 1334.50 is the LOD so far. The bulls have some work to do to regain control over the 50day SMA on SPX (1346ish)... but I'm trying to give them some room.

Thursday Morning

59 Minute Trade Opportunities: BBBY and RHT

Both of these stocks reported earnings after market on Wednesday and they sold off hard.  This is the kind of move that sets up for a 59er.  If you have never tried it before and you want to give it a go read (below) about the SMG trade.  I don't recommend that you try both unless you feel comfortable and can give them your undivided attention.  If the market isn't crazy from overnight news either one (or both) can give you a very nice return.  Below is the 3 minute chart of SMG on 6/13.


The Trade   (If it does not set up don't force it.)

As trading begins you are watching for the opening print and the low. Make note of both of these figures. When the first green candle prints hit the buy button. You would be in here under 36. Since this is a bounce trade it is expected that the low of the day has already been made and the stop should be just below that.

This trade will likely move very quickly so be ready to add. If the stock has not yet cleared the opening print (this one did) then wait for it to clear that level and then add aggressively. If it continues to move higher then fill out your position if you have not already done that with the first two buys. As each successive buy is made place a stop just under that buy point and watch.

When volume begins to slow be ready to take some profits (I like to sell 1/3) but let the rest run. Unless you want to hold the stock longer than today I think it's best to move your lowest stop up to insure you will have profits.

As the name of the technique suggests this trade is likely over in the first hour as the sellers have dumped and the bounce buyers have gotten their fill. I have used this method many times and it's one of my favorites. The risk is very low if you put that stop in as soon as you make the first buy and then respect it.