SPY Volatility Increases 12-21-15 | Stocks to Trade

SPY Volatility Increases 12-21-15Does your trading plan adapt to market conditions?

As the SPY volatility increases, the distance between your stop-loss and your entry price widens. This means you need a plan to adapt your share size. Assuming you risk a set dollar amount per trade, you will allocate fewer shares to risk the same dollar figure.

For example: If your risk per trade is $100, and your stop-loss is .50 from your entry price, you would trade 200 shares on your initial entry. If volatility increases and your stop loss is now .80 from your entry, your new initial share size is 125.

To get the correct figure in this simple example you divide the dollar you are risking on the idea, by the distance between your stop loss and entry price.

In this case it is $100/.80= 125 shares. 

In the last ten trading days, the SPY average true range has increase from 2.22 to 3.47. (The distance from high to low averaged out over the last 14 days.)

This formula is more of a guideline than a specific rule, but it’s a great place to start if you don’t have a system to adapt in your existing trading plan.

Stock Market Today: Map of the S&P 500

(click the map for a full view)

SPY Volatility Increases 12-21-15

Day Trading Game Plan: The SPY ETF Outlook

The $SPY is holding the $200 support. A rally into the $204.25 area would be a 50% retracement using Thursday and Friday’s price action. This is a solid target for an oversold rally today.

(click the chart for a full view)

SPY Volatility Increases 12-21-15

Pete’s Notes:

  • A lot of stocks showing short-term capitulation through 2X normal volume.
  • AAPL broke support.
  • Tough to initiate a new short-sale in oil.

Technical Analysis | Charts of Interest

KR The Kroger Company

KR price action broke out of a triple top with nice volume. An open near the 20 ema today on the daily chart would be a spot to look for a new entry to buy.

(click the chart for a full view)

SPY Volatility Increases 12-21-15

 

SPY Volatility Increases 12-21-15

SPY Volatility Increases 12-21-15 | Stocks to Trade

> 20sma | positive week | closed 2% higher from the open: GPRO, SRPT, BXLT, CSIQ, AR, SCTY

<20sma, negative last 5 days and closed 2% lower from the open: wmb, pxd, wtw, clr, xpo, oke, ba, slca, afl, lng, nfx, tol, bbby, cop, pru, aapl, sm, etp

Bullish Ideas ATR/Volume/Price: SRPT, BXLT, QUNR, TEVA, SCTY, MCD, TRIP, FSLR

Bearish Ideas ATR/Volume/Price: wmb, pxd, kmx, clr, xpo, gs, dis, lng, nfx, bby, cop, pru, bbby, cop, aapl, ksu, stt, unp, apc, twx, mpc, adi, utx, mmm, etp, dvn, gme, wdc, cmi, thc, hfc, ua, vmw, rrc, lvs, cf, mbly, bhi

Weak Stock Weak Close: wmb, pxd, clr, xpo, ba, gs, dis, hp, afl, lng, bx, nfx, c, tol, bbby, cop, pru, aapl, slb, etp

Strong Stock Weak Close: KR, DAL, PG

Weak Stock Strong Close: mbly, feye, su, cnq, adm

Strong Stock Strong Close: SCTY, SRPT, CSIQ, BXLT

20 day Breakdown: wmb, pxd, clr, xpo, oke, ba, slca, dis, lng, tol, pru, aapl, slb, ksu, cof, len, axp, twx, cam, mrk, cost, sm, adi, sbux, kmi, mmm, acn, gme, dhr, cce, hog

20 Day Breakout: CCL

2x Normal Volume: AAPL, MSFT, QCOM, WMB, DIS, TMUS, AIG, KMX, PG, SBUX, AXP, AR, MOS, MDT, STI, PM, ENDP, BEN, OKE, BA, BHI, IBM, LEN, LNG, UPS, EXPE, GS, PNC, BBBY, WPZ, KSU, CMA, NUE, MMM, GME, ACN, D, PXD, TOL, NEE, CCI

Watch List Longs: MCD, DAL

Watch List Short: dis, abt, ms, cop, pru, axp, hal, mrk, all, wmt, kss, bhi, adm, c, tol, ntap, orcl, akam, m

Inside days: dvn, cnq, jd, mpc, oxy, stx, kors, lvs, bhp, nbl, teva

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