Stock Market Price Action Strategy 9-18-15

Today you are faced with FOMC hangover and quad witching

How definite is your trading plan for the day? Can you have an edge with so much noise? Is your edge a long-term edge or day trading edge?

What is the correct stock market price action strategy in a tape with so much indecision? Moving averages? Nope. Most of the charts are broken because of the china meltdown.

Long-term trend following. Maybe, but certainly not in the SPY. 2015 is the year of the great trading range.

stock market price action strategyPrice action gave us a tease the five days prior to the FOMC announcement that left interest rates unchanged. It looked like we were ready-to-launch out of an ascending wedge and get back to a bull market conversation.

It didn’t happen and today (7am) the futures are pointing sharply lower. So…what is your strategy? Where is your edge that justifies risk?

The best trades have “time frame continuity.” This means longer time frames are obvious. It means you find an entry signal on a shorter time frame in that direction. Right now the longer time frame is fuzzy.

Day trading strategy is the correct plan for now. Grab this one one if you are struggling…

Stock Market Today: Map of the S&P 500

(click the map for a full view)

Stock Market Price Action Strategy

Day Trading Game Plan: The SPY ETF Chart

SPY is set to open lower at the bottom of the wedge. I see a higher push off the open and then a trend day lower. Shorting the lower open is not a good idea.

(click the chart for a full view)

Stock Market Price Action Strategy

Stocks to Trade | Friday September 18, 2015

Pete’s Notes:

  • Glad I didn’t trade yesterday. A few pockets of opportunity but I stick to my plan. It’s my rock in times of uncertainty.

Charts in Focus

Lululemon Athletica Inc. LULU

LULU has room to run…lower. The company missed earnings last week and the stock is resting comfortably in a 5 day pause. The next downside target is just below $46. [short-sale]

(click the chart for a full view)

Stock Market Price Action Strategy


Stock Market Price Action Strategy


Earnings in play today > 1M avg shares:

Stocks that showed relative Strength– contra to the SPY Negative change from the open on 9/17/15: FIT, LLY, UAL, GPRO, JD, HFC, AMBA, BX, HFC, AMZN, DISH, EXPE, ENDP, VYBR, DXCM, SRPT, VRX, SAVE, PBF, XON, FNV

Above the 20sma, up for the week and closed 2% higher from the open: (not necessarily all longs, but stocks to note for the price action of strong close from the open and above the 20sma): FIT, LLY, UAL, JD, BX, AMZN, DISH, EXPE, ENDP, DXCM, SRPT, VRX, SAVE, XON, FNV, JUNO, ILMN, AKRX

Bullish Ideas ATR/Volume/Price: LB, LLY, AVGO, UA, AMZN, NKE, TSLA, NFX, FB

Bearish Ideas ATR/Volume/Price: gpro, amba, qihu, wynn, cybr, lulu, lng, intu, cf, wmb, fltr, de, mon, clr, myl, baba, twx, hp, ppg, pnc, stx, qrvo, wtn, kss, cci, hes, cof,

Weak Stock Weak Close: apa, bbt, bk, cfg, cma, etn, jpm, kss, m, met, orcl, pnc, pru, sti, voya, wfc, wynn, zion

Strong Stock Weak Close: BBY, LB, NFX,

Weak Stock Strong Close: qihu, d, paa, wpz, cybr, nee, amba, feye, gpro

Strong Stock Strong Close: LLY, ATVI, JBLU, DHI, TMUS, AMZN, AZN

20 day Breakdown: cpgx

20 Day Breakout: LLY, UAL, COP, AAL, JD, DAL, ATVI, JBLU, DHI, CVE, PGR, UNH, UA, TMUS, CRM, AMZN, NKE, AZN, BHP, BIIB, TOT, MDVN

2x Normal Volume:  CVC, ORCL, VZ, MRK, SCHW, LLY, UAL, USB, AEO, INTU, TAP, AMTD, CVE, UA

Watch List Longs: BBY, MO, UAL, BRCM, DAL>48

Watch List Short: abt, met, pru, bk, pnc, wfc, usb, jpm, kss, wmt, cof, cvs, wynn, intu, nue, dd, m, qcom, orcl, vz

Inside days:  ete, lulu, ctrp, bidu, fti, pot, ctsh, nov, ca, fslr, twtr, wfm, yelp, kors

Stock Market Price Action Strategy September 18 2015 | Quadruple Witching Defined

Quadruple Witching Day: What is it?

DEFINITION of ‘Quadruple Witching’

The expiration date of various stock index futures, stock index options, stock options and single stock futures. All stock options contracts expire on the third Friday of each month and once every quarter – on the third Friday of March, June, September and December – all four asset classes expire on the same day. Because futures and options investors must close out of their positions on those days, they often witness increased trading volume.

INVESTOPEDIA EXPLAINS ‘Quadruple Witching’

The term “witching” comes from the fact that in the past, the expiration of futures and options contracts occurred not only on the same day, but at the same time. This often resulted in a period of greater-than-normal market volatility, which became known as the “witching hour.” Due to this increased volatility and frenzied market activity, many investors approach the markets differently on witching days.

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