Great stuff! Thanks for sharing!

oldarmy1,

I'm building a screener to look for those volume bottoms. How would you tweak this to meet your initial criteria?

Volume > 5 * Avg Volume (looking for those big volume days)
50 DMA < 200 DMA (looking for stocks in a downtrend)
Last < 50 DMA (again looking for stocks in a downtrend)
Market Cap > $2 Billion (at least a midcap stock - looking for liquidity)
Volume > 500000 (another liquidity test)

Interesting. We closed above the 61.8% retracement of the initial channel from Aug 7 to Aug 16 (2167 to 2190 channel). If we close up today, would you be eyeing that 100% retracement as future resistance, or no simply because of weak volume on Aug 7 getting us to 2190?

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Interesting. We closed above the 61.8% retracement of the initial channel from Aug 7 to Aug 16 (2167 to 2190 channel). If we close up today, would you be eyeing that 100% retracement as future resistance, or no simply because of weak volume on Aug 7 getting us to 2190?

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Good eye but, as you correctly point out, no volume so no-go on using that.

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oldarmy1,

I'm building a screener to look for those volume bottoms. How would you tweak this to meet your initial criteria?

Volume > 5 * Avg Volume (looking for those big volume days)
50 DMA < 200 DMA (looking for stocks in a downtrend)
Last < 50 DMA (again looking for stocks in a downtrend)
Market Cap > $2 Billion (at least a midcap stock - looking for liquidity)
Volume > 500000 (another liquidity test)

buy/sell volume looking for a 30% skew to one side
Average Lot (trade) size set to track 10k+ share trades

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Obvious market sale orders at the open as we immediately traded below the premarket futures.

Hey Parrish! How do you feel about those SN covered calls this morning???

You WANT those shares called out because if SN has been under a short squeeze it's going down like CLF. If they get called out it means the other 70% of your holding shares are solid. When applying a covered call strategy you don't want to get into a mental conflict about reducing your holdings versus guaranteeing gains. So what you actually want to happen is this early move down, which BTW filled yesterday's gap up, to find support and move back up. Otherwise a 50% retracement from the volume breakout day on August 8th will be right around $8.03 which guarantees a move under $8 as a "magnet" move. I'll go into the magnet aspects of stocks and markets this weekend. Amazingly accurate for purely an emotional technical indicator.

Keep it purely strategic discipline and you will always come out ahead. ALWAYS!

Meetings until right at closing so will try to check back in before closing for any major reads on markets.

10:30 traders trampolined the markets. Shorts are not permitted around here.

Thoughts on FEYE? Can she fill the gap?

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10:30 traders trampolined the markets. Shorts are not permitted around here.

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You got that right! Lunch time!

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Hey Parrish! How do you feel about those SN covered calls this morning???

You WANT those shares called out because if SN has been under a short squeeze it's going down like CLF. If they get called out it means the other 70% of your holding shares are solid. When applying a covered call strategy you don't want to get into a mental conflict about reducing your holdings versus guaranteeing gains. So what you actually want to happen is this early move down, which BTW filled yesterday's gap up, to find support and move back up. Otherwise a 50% retracement from the volume breakout day on August 8th will be right around $8.03 which guarantees a move under $8 as a "magnet" move. I'll go into the magnet aspects of stocks and markets this weekend. Amazingly accurate for purely an emotional technical indicator.

Keep it purely strategic discipline and you will always come out ahead. ALWAYS!

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I definitely got nervous about the strategy seeing it climb this week, but I knew I'd see my gains shrink if I didn't make any of the moves you were suggesting. It's so weird to say 'I'm glad it's going down.'

I have money waiting to buy again at the next low spot.

Throw away day. Bulls still have the ball.

Alright I haven't figured out how to add the buy/sell skew or the large trade lots to the stock screen, but right now the screen produces one stock: ADS - Alliance Data Systems

This stock actually only passed when I lowered the volume screen to 3x Avg Volume. Not sure if that's big enough volume.



All of the action happened on a selloff just before 11am.



The only news I could find on it today is that a hedge fund nearly tripled it's position in ADS last quarter.

BRIEF: For the six months ended 30 June 2016, Alliance Data Systems Corporation revenues increased 10% to $3.42B. Net income decreased 23% to $214.3M. Revenues reflect Private Label Service & Label Credit segment increase of 21% to $1.72B, Loyalty Service segment increase of 3% to $706.9M, Epsilon Marketing Service segment increase of 1% to $1.01B. Net income was offset by Epsilon Marketing Service segment loss totaling $1.7M vs. income of $26.8M.

P/E of 25.26. No dividend. Beat EPS in the last four quarters, but missed on 3 of 4 revenue estimates.

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Alright I haven't figured out how to add the buy/sell skew or the large trade lots to the stock screen, but right now the screen produces one stock: ADS - Alliance Data Systems

This stock actually only passed when I lowered the volume screen to 3x Avg Volume. Not sure if that's big enough volume.

http://imgur.com/s7WDVCl.png

All of the action happened on a selloff just before 11am.

http://imgur.com/EJDv3RM.png

The only news I could find on it today is that a hedge fund nearly tripled it's position in ADS last quarter.

BRIEF: For the six months ended 30 June 2016, Alliance Data Systems Corporation revenues increased 10% to $3.42B. Net income decreased 23% to $214.3M. Revenues reflect Private Label Service & Label Credit segment increase of 21% to $1.72B, Loyalty Service segment increase of 3% to $706.9M, Epsilon Marketing Service segment increase of 1% to $1.01B. Net income was offset by Epsilon Marketing Service segment loss totaling $1.7M vs. income of $26.8M.

P/E of 25.26. No dividend. Beat EPS in the last four quarters, but missed on 3 of 4 revenue estimates.

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Daily chart is ugly....

Yep, looking for Volume on the bottom and that's it.

I swapped the screener looking for Volume based tops and while most of the moves were earnings gaps up, I did find one interesting stock. Comerica (CMA) looks like it is finishing a barrier triangle C wave.

I'm on mobile, but I see a three part A wave from June 1 - June 27. A five part B wave from June 27 - July 27. And then a barrier triangle C wave from July 27 until now. The most interesting part is that there was a huge volume spike on Friday. Is that the big boys buying in prior to a move up?

* Disclaimer: My experience in Elliott Wave analysis is measured in hours...

Lot size of 5k+ share size was to the down side of CMA Friday so the failure to break out on that volume spike would more likely be a top. That said your overall pattern, including a perfect bullish cup & handle since July 27th to Friday makes it a mixed bag. That's a trade I wouldn't make because I don't see definitive entry strategies right now. When people talk about "hammer" patterns Friday candlestick chart on CMA is what you get, although you prefer to see close higher than open on that pattern.

Everything posted pre-market Friday that ended up being a throw away day is in play again today. We had no breakout after pushing back higher off early selling. We stat today in the same position with futures down.

We had a 90+M volume DOW reading Friday. If that volume grows today with a move above or below Friday's low mark or high mark the short term trend will be to go with whichever way it moves, for a larger move over several days.

Keeping covered calls in place, along with any hedge Puts makes sense with the Fed meeting later this week.

Happy trading!

Some volitility returning to the market. 5-7 point swings in 5-10 mins today. VIX holding up. We have GDP and Yellen on Friday.

2 hours until close and we're sitting at 6.1% of average daily volume on the S&P

Oldarmy, what do you think of shorting bonds for a long term swing trade? Even if market corrects, yields are already so low...

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Oldarmy, what do you think of shorting bonds for a long term swing trade? Even if market corrects, yields are already so low...

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I know a lot of very big traders who have been looking for the right entry time. I don't trade the bond markets but can let you know when they are executing their plans.

Joseph Parrish - Your covered call sells last week are playing out exactly like you want them to so far. Well done!

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2 hours until close and we're sitting at 6.1% of average daily volume on the S&P

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Who knew it was all the kids out of school providing the volume.

Ya I would appreciate greatly a heads up on the bonds play!

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Oldarmy, what do you think of shorting bonds for a long term swing trade? Even if market corrects, yields are already so low...

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There are two problems with a long-term short on individual bonds. One is that they are a negative carry position. Keep in mind that you are on the hook for the coupon interest, not the YTM where you sold. Additionally, the yields on bonds should drop as they get closer to maturity. Theoretically every day that passes increases the value of a bond assuming the yield curve is stationary.

IMO, you'd need to have a good thesis as to why rates should rise in the short term, otherwise the cost of carry and the price increase that comes with the roll down would chew up all of your profits.

Would be shorting something like TLT or /ZB

For those who jumped in on the KMI trade at 19, we have resistance at $22.30 levels July 20th to today. When it pushed above that on august 18th note the volume increase showing us bigger sells meeting buying demand. Would require a large volume day to break it out above that which is why the covered call strategy was applied.

It quickly fell back and is now approaching the real resistance mark of $22.30 and bounced off $22.28 a couple of times thus far. If the macro markets surge ahead then expect it to break through for a new bull move higher, much like a lot of stocks challenging resistance.

CMA is up this morning and approaching it's own resistance. It's like a big game of "chicken" isn't it?

No follow through on the gap this morning but net volume has steadily stacked up all day.... Strange

If we don't rally into the close I would expect a huge red day tomorrow

So in days like the previous three where we have <10% of typical volume, do you consider those a total throwaway days?