DDaaaiiillyy a IIIddd eeeaallliiizzzee ddd e TTTrrraaadd ... … · critical GRAVITY and VA Extreme target price "should" trade up toward, and then perhaps higher above it Let's be

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© 2018 TheoTrade LLC. All rights reserved.

1 Idealized Trades Report for Tuesday, October 16, 2018

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Trading Lessons from the Intraday Frame (study)

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Trading Lessons from the Intraday Frame (1-min)

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Still, not much has changed with the plan except that the 2,810 level is a

critical GRAVITY and VA Extreme target price "should" trade up toward, and

then perhaps higher above it

Let's be honest - if buyers don't step in here and overtake sellers when they

have the chance/odds in their favor, then we're likely to see another "failure

to bounce sufficiently" alternate thesis collapse toward then under 2,700 if

we don't get a continued immediate bounce off current levels.

These are the clear planning points (seen best intraday) and be ready for real

time action.

Major Companies Reporting Earnings

IBM, NFLX, JNJ, GS

Major Economic Reports for Tomorrow...

Housing Starts (8:30am)

Crude Oil Inventory Report (10:30am)

Quotes from Last Night's Planning

Superb TREND DAY! Dominant Thesis! Movement up through our Open Air Pocket!

Movement straight into DonK's 2,811 Gravity Point.

The ONLY profitable strategy was to hold a core position long or trade around it with small flag

pullbacks mainly on the 1min or 5min chart as the trend day strengthened. We did get our

sideways consolidation during lunch but the market was on a mission to trade higher toward

our 2,810 target and that's exactly what it did, giving us retracement trades along the way.

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Power Trending Strong Uptrending Stock Scan

We're seeing the NEW top twelve relative strength leaders (via algorithm) in trending markets and the general

expectation is to buy retracements or breakouts in these strongly trending names. The logic is that what is

strong tends to get stronger (stocks attracting money flow tend to continue attracting additional money flow).

Right now these would be the names and thus candidates above for you to do additional research and add

these to your stock-scan list for possible inclusion into a swing trading portfolio on pullbacks or outright

breakouts.

HOW WE USE THESE STOCKS:

I write the Power-Trending Stock Section for Swing Traders looking for candidates that complex stock scans

will likely miss. The scan targets strongly trending stocks and the expectation is that price will continue

trending higher, though of course additional analysis is required rather than just buying these names

collectively. To participate in these stocks, we typically wait for a pullback/retracement to a rising moving

average or Fibonacci/Trendline level to put on a buy/retracement where the stop is trailed under the average.

These would be similar to how I describe intraday 'flag' retracements on a developing Trend Day.

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Tightly Compressed SP500 Stocks (Low ADX Scan)

Here are the top six "Compressed ADX" (lowest ADX) values from our simple scan of the S&P

100 (in Think or Swim).

The goal of this simple stock scan is to identify compressed or consolidating (RANGE) stocks

and either:

A) Play the fades (like a Range Day) into the trendlines by shorting the high and buying the

low or

B) Put these on a separate watch list and then WAIT for a breakout event to trigger a buy or

sell-short swing trade to trade the RANGE EXPANSION play after the current CONTRACTION.

Or, you could trade more complex strategies like butterflies, iron condors, or even prepare in

advance for a possible breakout with straddles or strangles (advanced options traders).

We'll update this scan and ideas like it at the beginning of each week.

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"S&P 500 Sector Performance" View

This chart and sector comparisons are useful two ways:

First, we get a broader sense of what's going on beneath the market subdivided into sectors.

Second, if you trade beyond the S&P 500 or futures/ETFs, you can pinpoint bearish/weak

stocks by starting with bearish/weak sectors.

The idea is out outperform the market via short- selling a weak stock(s) in weak/bearish

sectors on a down trend day (or vice versa).

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Planning the 30-min Intraday /ES Volume Profile

I'm adding DonK's GRAVITY POINTS to the chart above - notably the 2,731 and then 2,811

level. Note that if these levels fail, then 2,682 is the lower gravity point.

For now, we're in extended profile with few reference points due to the collapse and rapid

movement through the OPEN AIR POCKET beneath price.

Price is moving UP from our lower 2,731 level toward and perhaps now THROUGH our 2,811

level as the Open Air Pocket is wide.

Continue watching the Daily Chart and the Open Air Pocket through which price can continue

to move rapidly (but hopefully we get smaller pullbacks along the way as opposed to straight-

up action).

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Planning the 30-min Intraday /NQ Volume Profile

While the logic is the same as the /ES, the levels and pockets may be different.

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Planning the Next Day (Daily S&P 500 Cash Index)

And buyers stepped in with a purpose today, surging price up away from our pivot points and

the 200 day SMA through Open Air pockets higher. Focus on our Gravity Spot and 2,800 to

continue playing bullishly above it and cautiously if beneath it.

We're likely to see a bit of range contraction or consolidation tomorrow and keep focused on

the early price action of Netflix and IBM off the open for further clues.

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Disclaimer:

Neither TheoTrade or any of its officers, directors, employees, other personnel, representatives, agents or independent

contractors is, in such capacities, a licensed financial adviser, registered investment adviser, registered broker-dealer or

FINRA|SIPC|NFA-member firm. TheoTrade does not provide investment or financial advice or make investment

recommendations. TheoTrade is not in the business of transacting trades, nor does TheoTrade agree to direct your

brokerage accounts or give trading advice tailored to your particular situation. Nothing contained in our content

constitutes a solicitation, recommendation, promotion, or endorsement of any particular security, other investment

product, transaction or investment. Trading Futures, Options on Futures, and retail off-exchange foreign currency

transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether

trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of

your initial investment. Opinions, market data, and recommendations are subject to change at any time. Past

Performance is not necessarily indicative of future results.

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DDaaaiiillyy a IIIddd eeeaallliiizzzee ddd e TTTrrraaadd ... … · critical GRAVITY and VA Extreme target price "should" trade up toward, and then perhaps higher above it Let's be