SPY Volatility Begins September Trading With a Gap Lower

I have quite a few friends swing trading right now. I think they should be in cash. They are part-time traders with jobs in other fields.

This is a tough tape to hold over-night positions with any conviction. Day trading, however, is very good if you have the patience to wait for the best trade setups. Most of which have arrived in the afternoon. Trading the open is a non event right now with so much indecision.The SPY volatility and lower open (6:30am) is the price action most traders were expecting on Friday afternoon.

Be smart if you are not in front of your trading screen all day this week. There is plenty of opportunity to earn money trading over the course of 2015. The last week of summer with global turmoil is a tough fight to pick with the stock market.

The U.S. equity markets decline of 6% was the worst month in 3 years.

Stock Market Today: Map of the S&P 500

(click the map for a full view)

SPY Volatility

Day Trading Game Plan: The SPY ETF Chart

Expected SPY volatility after a weekend of fresh news never arrived. The $TICK indicator is a great tool for day trading right now to keep you out of trouble.

(click the chart for a full view)

SPY Volatility

Stocks to Trade | Tuesday September 1, 2015

Pete’s Notes:

  • Stock specific trading right now.
  • Overtrading can be very expensive this week. I have no problem with fewer positions until we get a few days of trading with clear higher-highs and higher-lows (or vice-versa).
  • CVX, XOM, OIH showing short-term strength.

Charts in Focus

Norfolk Southern Corporation. NSC

NSC offering $5 profit potential on this daily bear flag with clear support just above $72. Average true range is $2.22 so this could be a nice two day trade into that profit target.

(click the chart for a full view)

spy volatility

Earnings in play today > 1M avg shares: AMBA, BOBE, EXA, GWRE, HRB, PRGN, QIHU, SCVL

Stocks that showed relative strength– contra to the SPY – change from the open on 8/31/15: COP, HAL, CAM, SNDK, NOV, CLR, NFX, HES, BHI, HP, MUR, GMCR, SLCA, PXD, URI

Bullish Ideas ATR/Volume/Price: NFLX. TWC, UA,

Bearish Ideas ATR/Volume/Price: viab, fit, wynn, juno, gpro, terp, twx, vtr, lvs, kss, grub, baba, m, dis, feye, all, qihu, bidu, dvn, wpz, de, bx, nxpi, unp, myl, qcom, mjn, slca, hot, ir, lng, sndk, antm, utx, yelp, pg, adsk, nsc, slb, etn, mmm, mur, mon, xom, apc,

Weak Stock Weak Close: wynn, juno, gpro, jd, vtr, baba, feye, bidu, yhoo, rax, isis, hcn,

Strong Stock Weak Close: ATVI, CCE

Weak Stock Strong Close: viab, dvn, ms, slca, sndk, cog, joy, cnq, bp, gm, slb, adm, xom, apc, coh, cat

Strong Stock Strong Close: CAM, BBY

20 day Breakdown: exc, nee

20 Day Breakout: BBY

2x Normal Volume: DO, NBL, NEE, PSX, CNQ, DLTR, KIM, SLB, COP

Watch List Longs: BBY, SBUX, TWC

Watch List Short: kss, all, wynn, lvs m, qcom, sndk, wmt, mrk, slb, adm, ko, xom, hpq, emc, orcl, dd, txn,

Inside days: do, adsk, cvx, wy, amtd, hpq, aem, nue, mat, mxim, schw, cag, hig, wfc, len, qihu, nsc, mchp, ebay, csx, tsn, mos, ip, wmb, cybr

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SPY Volatility Begins September Trading

 SPY Volatility Begins September Trading

Stock futures point to steep drop on China, data jitters

U.S. stock index futures pointed to a sharply lower open on Tuesday, with Dow futures down in excess of 380 points in pre-market trading, following some weaker than expected Chinese data.

Two sets of key Chinese data disappointed traders on Tuesday. The official manufacturing purchasing managers’ index (PMI) edged down to 49.7 in August from 50 in July, while the final Caixin/Markit manufacturing PMI came in at 47.3 in August, the lowest reading since March 2009.

The numbers failed to calm ongoing jitters about the world’s second-largest economy, which led to the worst month for more than 3 years in August on the S&P 500 (^GSPC), the U.S. benchmark stock index.

Two key reports are due out on Tuesday: The August ISM manufacturing index at 10 a.m. ET. and U.S. auto sales, which are expected to show continued strength in the consumer.

As of the market close on Monday, analysts polled by Thomson Reuters expected a read of 52.6 for ISM manufacturing, a tick lower than July’s 52.7 print.

Construction spending data will also be released at 10:00 a.m. and will also be in focus for traders ahead of Friday’s highly anticipated official jobs report.

Also in focus will be a speech on the economic outlook on the U.S. economy from Boston Fed President Eric Rosengren in New York at 1:10 p.m. ET.

Continue reading on cnbc.com

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Leave a Reply 7 comments

lou Reply

Hey Pete,

Curious how you use $TICK in your decision making process…and on what time frame you observe $TICK on? I have specific guidelines I use on 15m $TICK candles relative to divergence/convergence to the market… as well as absolute readings and proximity and closes to zero line….to help determines odds for or against a thesis.

    lou Reply

    I didnt quite express that very clear… I meant: “…. and preponderance of evidence that may reveal itself as to proximity of the close of the candles relative to the zero line as well as the overall candle bodies proximity to the zero line….as well as the “hard right edge” of what is happening NOW at any given time relative to those scenarios

    Pete Renzulli Reply

    Hey Lou.
    I apologize for the delayed reply. Jammed up this week.
    Will write back this evening
    have a great day

    Pete Renzulli Reply

    When I use the $TICK I am primarily focused on the zero-line, + or – 500, + or – [1,000]
    between 0 and + or – 500 I do not consider there to be significant institutional activity so I will tend to be less aggressive and not add to positions. I don’t expect follow through.

    If we start to get pushes toward + or – [1,000] I adjust and hold longer and add to positions.

    if the SPY makes a new high and the $TICKS do as well, I consider the market and order flow still strong.
    If on the next push higher in the SPY, if the SPY makes a new high but the $TICKS do not…I consider this a potential change of order flow and look to trail a stop loss on a good trade long.

    If you are a momentum type trade you can of course exit into those same extreme ticks readings as well.

      lou Reply

      Excellent Pete! Lots of similarities I can see.

      Great points about the relationship with SPY.

      Another variation on how I look at that which I picked up from Peter Recnizek is “if looking to go long…or looking to stay long– it’s not how high the $TICK goes…it’s how LOW IT DOESN’T GO” and vice versa “if looking to go short…or looking to stay short–it’s not how low the $TICK goes… it’s how HIGH IT DOESN’T GO”. Basically the thought process is when you are “monitoring internals for/against a thesis”.. when pauses/or retraces occur in opposite direction of your thesis… a lot of information can be gained on how weak/strong that move really is thru the $TICK move during that time…as an ODDS INDICATION of whether the retrace is likely to dominate and continue… or the current prevailing bigger move is going to resume.

      So in your example– if SPY came into that new high of day with a key higher timeframe supply level just above…and $TICK doesn’t make its new high… I would have more conviction to short the countertrend move…. vs if $TICK does make the new high of day– then I am more inclined to pass on the short due to the poor odds indication and instead wait for a retrace as a reason to go long with trend.

      Good stuff Pete thx

        lou Reply

        Great example today how going long in /ES on the pullback after opening drive had odds lowered via TICK assessment:

        “When looking to go long– its about how LOW THE TICK DOESNT GO” — TICK made multiple new LODs while /ES merely pulled back 50%…eventually things accelerate…the TICK was a sign getting follow thru back to upside was going to be difficult.

        On flip side– notice how TICK did NOT make a new LOD when the market does at 2pmESTish. If you are at a key level of demand and want to counter going long– the above mantra criteria justifies an entry…which as you can see fulfills nicely for about 30-45 minutes.

          Pete Renzulli Reply

          good point about how low it doesn’t go

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