Market moves vs. panic moves | Pat Mullaly, CMT | 10-1-19 | Active Trading Strategies


some I assume numbers that was a shock to the market is it really that big of a shock stick around. Hi good afternoon good morning good evening wherever you are in the planet. My name is Pat Mulally this is active trading strategy we’re gonna look at the market moves suddenly. At twelve o’clock eastern time we had some fast changes in the market arches ten o’clock is time fast changes in the market took the market down so we’re gonna take a look what the those market moves what it might be saying. But before we do any of that let’s get to our- disclosures and that is that. Options are not suitable for all investors as the special risks are inherent to. Options trading may expose investors to potentially rapid and substantial losses trading futures and forex involves speculation that’s not suitable for everybody. Spreads straddles other multi leg option strategies can entail substantial transaction fees which can. Involve our which can. Mitigate any gains on a- trades with potential men of mold in a fit try to get that out we’re gonna look at live symbols that it does mean we’re making any kind of recommendation and any investment decision you make. In your self directed account solely your responsibility past performance any security does not guarantee future returns and remember that all investing involves risk including the risk of loss. Delta gamma Vega theta should we talk options and Greeks that is the option sensitivity to changes in price time and volatility three most important parts of option pricing so with that let’s get out there and take a look at the markets let’s welcome everybody in. We’ve got Bethany we got this site yeah. And hope I said that right Lori alleys in the room. Syria th hoping I said that right Jeez I am so sorry I should I should practice up on that but as people come in we will welcome them as well and let’s take a look at what we have here in the markets I am going to jump out. To the big screen here. Not that screen. This screen. And world talk about. We’re going to talk about some of the. Things that might be going on in the market today and that is the fact that the market’s been we had a pretty sharp selloff let’s come up here and bring this into a five minute chart. And we’re gonna see on this five minute chart is the fact that we sold off extremely fast on that I. S. M. number is a matter of fact if we zoom in on this. And get a little bit better look at that what you see here is that when that I assume number came out we had. At the top you know a bit of a bit of a rally going on. Early on in the in the in the going and then bone that number came out in the question becomes here. Are people looking for a reason to sell if they’re looking for a reason to sell anything is going to shock the market. But this was the I. S. M. the- is a Jew to supply management. P. M. I. perching met purchasing manager. Managers index and this had to do with the manufacturing side of that. And it what and there wasn’t a single row in there that was positive everything showing some contraction. In the manufacturing sector now we have. That’s a smaller part of our economy just remember that smaller part of our economy the service the PMR that. I assume service is coming out. I want to say coming out tomorrow maybe the next day but it’s coming out soon. And that is going to. Maybe have a bigger effect but the manufacturing nobody want to see that. In and it again from all segments new orders employment numbers. Inventories lots of things contracting not necessarily. A good thing and that’s two months in a row. But do believe that we look at it from that aspect. Two months in a row that we saw that. That’s why we see the big downward the big downward push. In the intraday okay in the intraday and the reason. That’s important is. Because anything can happen by the end of the day now I do have a. The conviction indicator up here and for those that don’t know what that is it is a measure it’s a different type of a measure then you would see with the typical oscillator and we’re looking at the quality I’m gonna say the quality of buying or the quality of selling. And today we can see here were down almost nine tenths of a percent on the day maybe. We probably got very close 21% and what we’re seeing with this with this indicator is it is. Sitting here at. Sitting there at around eighteen so below 20% it’s not horrible. And so the question becomes are we seeing any kind of a are we seeing any kind of panic coming and we talk about panic remember what we what we’re looking for with panic. Is simply. Looking for. Price are looking for the conviction indicator to drop below ten that showing us the willingness of people to really start to sell harder right and so what we’re seeing here is yeah there’s some quality selling going on today we’ve drop below the low from. About a week ago on that yesterday let’s zoom in on this and if you want to know this is a script that I built this is an indicator that I built and here’s the script there’s couple ones out there if you watch my archive you’ll see that we look at this you know every day this is an important day for this and the script is lowercase B. K. D. F. zero nine lowercase P. lowercase B. K. D. F. zero nine lowercase P. I. N. DA you can put that into your- at a are you in your studies. And then you can pull this up it will pop in your studies is an upper study need to drag it down into the lower studies. All right let’s zoom in on this. And the reason I started out the- today with the what what are we what is it trying to say. When we look at this yeah we’ve got some some quality selling coming in. But we’re still seeing price. I can get this to move I’m sorry. This is not going to move there we go. At that kind of out of the way here. We’re seeing price hold. We’re saying price hold that support area in there so far that’s an important that’s an important area that’s I don’t say it’s the demarcation point because in reality were still in this longer term uptrend as a matter of fact if we drew. A line here. Offer these lows. We may even see appears of this. Support line and hit this. Up trending line and see a start to rally we’ve got a two hundred day moving average on here in in actuality if you look at a one her day moving average that’s an area that we’re going to be concerned with the fifty day. Is probably becoming an area of. Of a concern for some of the other indicators matter fact let’s go over and look at. The nasdaq comp and what’s the nasdaq comp the nasdaq comp here is. The. All of the everything in the NASD whips everything in the nasdaq I’ll get this right here in a second. Forty bars just doesn’t quite seem to be enough let’s put on fifty. So I can now. Get some room over here on this side this is the nasdaq composite means is the smaller cap as well as the larger caps not the ND X. the nasdaq one hundred but this is a concern maybe by some folks because what we have. Is. A breach. Of that support area so when we look at that breach of that support area. We see that we’re coming in. Just like what I was saying on the S. and P. we’re coming into this up trend line of the S. and P. is not there yet the S. and P. is still sitting. At its support that sets up in that zone right there so we can see it popped down so far the nasdaq comp has not. A traded that up trend line. The next stop for the nasdaq it may actually be this two hundred day moving average if we zoom in here. That two hundred day moving average right here. And that’s going to be an area of a lot of concern now relative strength against the S. and P. five hundred. Not necessarily that to. That big a deal it is weaker man but this is where when we look at to see what the market’s telling us we talked a little bit about this yesterday in the ETF class. What the market might be telling us is if we see continued weakness and the nasdaq. And it starts to break down so if the nasdaq starts to break down. Below this line in here oops. And starts to continue to run down that may have a tendency the tendency maybe for the market itself the S. and P. five hundred to start selling down as well to the downside so we want to be careful about that now one thing I’ve got to say is because I know some more people have come in the room I don’t have my other monitor with me today and fortunately. Some issues they’re- not gonna be able to see your chats from here. So please bear with me if I’m not answering your questions I really appreciate it view. Don’t being me on that because- it’s important that I do get your get your questions answered so I’ll try to drift back over there. And look at those a look at those questions in a minute. But this is important here a break below this and at that point. If that occurs. Then. What we what we might see is a continuation to the downside and break down on the S. and P. five hundred which would be a- speak you know a signal of maybe something more nefarious is going but it may be happening but if we look at again. This up trend line. Again that won’t be necessarily out of the question to see price pop it down into this into this line. Okay let’s take a look at one other. And that is the Russell two thousand not be we talk about this you’ve heard and heard ad nauseum really about the Russell two thousand and what we’re going to look at here is the fact that the Russell has really just not kept up with the with the- market Jones’s over time so we’ve got this line up to this resistance line it’s- basically channeling bright. But it’s starting to look more and more like a descending triangle only say descending triangle we’ve got lower highs similar lows there little bit lower so we’re kinda wedging out that could in some form or fashion possibly be bullish but again it is it has hit its two hundred day moving average. Drifting below that. Today it’s only down eight tenths of a percent often times when we see the S. and P. selling off and the S. and P. down eight nine tenths of a percent often times you’ll see the Russell. Down you know person to have something like that we’re not seeing that necessarily today SO A lot us me a lot of. Strong selling in those small caps not. Not happening that we’re seeing as we’re seeing that today as a matter of fact. If we look at. Some of the things we may look at today when we get into some of the hopefully get into some of the stocks I want to look at maybe do some selling of puts looking at some other possible trades what we’re seeing here is the market forecast to line not the three line. But we do have. The. Near term line in that reversal zone right and so that’s where we’re going to look for. Some nascent strength in the Russell if we can see if prices for whatever reason holds the middle of the channel. And so here’s a price pattern school if you will the middle of the channel being. Oops. Middle channel being kind of in this area someone draw that now I want to race it real quick the reason is that we can see that. The Russell has. Been attracted to that area before right so if it gets attracted that if we can hold this time if you can hold in here this time then we may have a change in the complexion of the Russell and what we’ll look for this price to hold and if that if that occurs then we’ll look for. The. Near term line on the market forecast to start moving higher. Right at that point we’ll look for some kind of a- break out. A break out in the Russell two thousand so only time will tell. Know what your strategies are know what your protection strategies are you sometimes there’s opportunities in these sell offs and sometimes are telling us something else so right now though. What they’re telling us. Is the S. and P. is still holding in. It is the I. S. M. is selling off it’s your decision. To put on protection right now or to not put on protection right now. All right let’s move on to. Some of the things that were affected in this is going to be. As part of our strategy might be part of your strategy as to what you might want to trade in want you might not want to trade in. And from a top down approach. From a top down approach angle on what we mean by top down approach. Is. We main this summer drawn we did this yesterday as well draw triangle in here. In in my crude method here. We have a market we have industry groups are sectors we have industry groups and we have stock so the markets. Nothing really radically is change there’s some weakness in the nasdaq there’s some weakness in the Russell two thousand now we’ll see how that resolves itself so that could resolve to the downside we might see the- S. and P. resolved to the downside below this line so we look at the markets first from a top down approach. And we look at the sectors and which we’re going to do in a minute and we then you can look at the industry groups groups should you choose and then of the stocks right and so we look at the all the way down try to find the strong of the strong. A in a bull market and from a bearish standpoint the weakest want once technically but you can help we can do to use this for both both of those so let’s move on to what we have next up here. And that is the industrial. Sector I. X. I. so I XII is not a tradeable it’s not a tradeable index in in this form there’s other ways to do that but it’s is the industrials and so when we see the I. in the manufacturing start to weaken the way we’ve seen in the last two months industrials may take a hit as a matter of fact industrials have not been able to get off. Of the tarmac. For much the better part of this year if we do a line all way over through here so we’ve got some issues there big down day today. We zoom in. On industrials so a big long range day today is down one point 67% one point six seven percent. But still in reality interestingly enough as might affect me back out of this. And the catch up here a little bit what I want to for what I want you to look at some interesting. Is some interesting things and facts about the market forecast that we’re using here. Is it is an oscillator. And with this oscillator it oscillates back and forth. Often times it leased from a strength standpoint when. We say price prices always king price first price reach up into a resistance areas. The market forecast has had a tendency the Green Line the intermediate term line has a tendency to stay hi in here that’s a that’s a red and that’s red so you can be struggle saying that let’s draw a line across here. So the market forecast. Has a tendency to the Green Line the intermediate term trend line has a tendency to stay in the upper range. And the. When it oscillates back down what we dip back down into the lower range and that’s where that’s where it becomes important in reason I say that is. We spend we’ve seen it spend a lot of time. In the in the upper range. But hardly any time in the lower range the next phase over here the next rally up. The market forecast spent. A lot of time in the upper reversal zone and really all intents and purposes no time in the lower reversal zone so is there a change star that we’re starting to see in the in investor industrials are we starting to see the traders the in investors. Had to give up the ghost but because ten one you know a little blip does not necessarily a trend make but- what we’re seeing right here. Is that the market forecast Green Line not it’s ran into the reversal zone and right back out. And so we’re going to watch that fairly closely and the reason I say that is. That if this Green Line continues down. And the blue line continues down then we might be seeing a little more weakness coming in right now we’re not really seeing weakness one of the things I want you to start. If you’re new to start learning about. About channels is a strong channel. Well. I have a tendency over time to come down touch this line but as it drift lower. Makes a new high. Makes a new high we’re gonna look at as a matter of fact we’ll look at some stocks today the maybe setting up for a possible position paper position but we’ll look for that as the beast. To be strength on the in the other side of the coin. A weakening channel. A weakening channels going to see the opposite we’re gonna see price. Have lower. Come back up and make lower highs and that may be the precursor. To a precursor to a price breaking down so again. As a just as a Chartist. You know what you’ve seen before in in a you know you’re looking to happen in the in the future or not we’re not and we’re not. Addicting you know what. In any form or fashion we’re just looking for ed traits of weakness and that would be a trait of weakness okay so very important. That we look for those kinds of strength their weaknesses as we channel sideways wine because something’s happening here there’s something that’s causing this to drift sideways and- what we are not necessarily recognizing is this accumulation. That we’re saying or is it distribution if its distribution what’s going to happen is. Whoops. That is going to happen we’re going to start to see a price role to the downside if it’s accumulation we’re going to see the opposite of that. So that’s why we’re again we’re not predicting we’re looking for tracks in the sand. And so that’s what we’re seeing with the industrials let’s move on to the next ones that have been hit today. And that is. Other materials kind of goes along along with the industrials material sector getting beat up along with the industrial sector the difference here is that materials have been trying in in. The recent past trying to move higher now they’re coining up right what are we getting we’re getting the symmetrical. Triangle kind of look a big down day today again we’ve had big down days before what we’re going to look for is for price. To really. Hold this line if it even makes it down there if it turns and runs back to the upside then we’ve got then we might see some strength coming in again there’s a lot of discussion about trade that is going to be you will know a lot more in two weeks and that may actually change what we’re seeing in this picture right now all we have is the information in front of us and the information in front of it shows weakness in industrials. Weakness in materials. So when that occurs what do we see we see is some increases in the defensive names which we will look at later when I go back over to the other board. Let’s move on. And look at financials okay so financials weakening as well why why would financials be weakening and without me able being able to see the chats they may be weakening because of. The anticipation of lower interest rates fed meets again this month and then they meet again in December we’ll see what those numbers look like they’ll be some predictions that are going to be out there right now and what that I don’t know what those are. But we’re still seeing in in the financials again. The ones that just can’t get off the dole off the dime whatever you want to say this year. Really are the financials trying to trying to trend higher. Maybe broadening out a somewhat but coming down hard today probably in anticipation of the. Interest rates increasing and if we look over here on the side. And pull this over for a collapse it what are we seeing we’re seeing bonds the long bond is off a little bit but the ten year note is up sixteen thirty seconds that’s about a half a point. Now that is a half a point and the two year note’s up thirteen thirty seconds so we’re seeing yields falling if yields are falling. Then. What that means for. What that means for banks is you’re negative a negative bias as far as what they can make on their on their interest rates so banks. Right wing today as well so it’s move on. To energy. If manufacturing is weak. Energy may be. May struggle as well so it takes energy to run the factory factories it takes energy to get the stuff across the across the country and were ever and we’re seeing weakness in energy now it’s no it’s no surprise or it’s no secret that energy if you look at this two hundred day moving average energy continuing to push to the downside. Just rally back up failure at resistance failure at the two hundred day moving average so. Coming in and thinking that. It is it can’t go any lower who the heck knows we’re seeing the this in and this. Actor select we’re seeing it again just from the just from April drop A- where are we- they had dropped well over a hundred points hundred sixty points off of its high on this particular sector so all of these things are. Did today by be. Manufacturing numbers the I is the eight instructor supply management numbers and you can see here on every single one of these they all sold off. At the same time okay so big. Economic news I don’t know if we’ve seen. Any economic news recently that has moved the market is strong as this one as this. Is this number that came out today and the reason is that’s two months in a row and you’re gonna hear all kinds of stuff about recessions and then we looking at the- REITs. It’s hardly affected let’s go into a five. Day five minute chart of a- I should say REITs are real estate. Real estate I take that back REITs. Have things that you need to understand. Before you jump into REITs make sure that you. Read the prospectuses and know what you’re getting into on those. But this is a sector. Index and so what we’re looking at here you see REITs prior to. The announcement and this is. Let me zoom in on this because this is. Kind of an important psychological. And sector rotation idea that goes along with this so that goes along with. The real estate sector selling off before the number. Rallying. After the number made make that a little bit smaller rallying after the number now it has come back in. Making a- lower or hire gays. Everything spin out on me here. Making a higher low. We’re saying maybe a little bit of a coil on real estate. And we look at the next one here. And transportation if you’re gonna make stuff you’ve got to transport it if there’s too much inventory then people are going to be buying things you’re not gonna be transporting them and that’s what the I assume number was telling us. And we’re looking at the transports. Been week. Pretty much all year to a in and we can again today pushing back below the two hundred day moving average. Saying that intermediate trend the oscillation of the intermediate trend start to weaken again so there may be a strong downside bias on transportation. So that is the- that is the- kind of this sector look now what is what is strong let’s come back over here so I can look at the. And that may be coming in and what is strong in the markets today is going to be. The utilities sectors the real estate sector only only highlighted the real estate sector but that’s a is something important to recognize. Okay sell one so alley says you’re asking for more questions here we go C. O. M. P. as in the fifty fifty territory though it seems very short term S. and P. down trade trend could drag it down yeah so well. I’d put that around the S. and P. is made so this is. Let’s go back here and address that question so right now the important area. On the S. and P. ES. This yellow dotted line yell dotted line here if we can hold that great but the comp of the nasdaq if it continues to weaken or if in this is. Something I want everybody to watch and see what happens if the S. and P. starts to break down through the support line. That could be. A S. now I want to say so I guess I can say seminal moment but that’s gonna be a moment where we might see everything really start to take off to the downside. And check back in to some of the lower support and resistance areas this might be watching the S. and P. do this might be a reason for some people to. To protection maybe buy puts maybe buy puts and sell calls it’s a matter of fact education day is tomorrow and- Cameron may and James Boyd are going to do I think they’re gonna do something up callers but check into. Education date on on that and that could be a reason to buy some puts sell some calls against to protect those longer term investments but that could be the pot belly right there and we’ll- look. At the nasdaq whips. Look at the top the comp has already. Dropped below that line so we’re we’re mid point that were below the midpoint there but at that support area. Ricardo says everything is down for the day and again when they there’s an old saying when they raided the house they get everybody and the right now maybe that’s the flesh out. Excel you is were I was going to go next summer change this to ex L. you. And maybe not I can’t look at excel you sorry I. X. you my bad. I. X. you. And we can see that it is been strong and training and we’ve talked about this before. There is a- possibly a reason. To worry when we have. Excel you moving strongly and making new highs so let’s do this I’m gonna take this off when it remove some of these studies. Are easier if I go up here to the beaker pop down the edit studies and click the exes and then. Apply those and then let’s get rid of that line. And what we’ll do here is I’m going to do a comparison chart studies and go to the right click on studies just above the studies tab just above the chart come down a quick study. Window click on our put your own quick study slide over to the next window go to compare with and then we’re gonna put in. S. P. X. and so the reason I put this in if we look at this. On a two year daily chart. What we what we look for and I’m not saying that this is we even remotely close to happening but let’s look at. The. Last one of the times where we see. The S. and P. up here at highs this this purple line here is the S. and P. I’ll just gonna highlight clips no I’m not not like that will highlight that a little bit so you just kind of see so we see this purple line moving higher on the S. and P. we also see. At the same time. That this was happening. That the. Utilities right here the candlesticks here warm but we’re pushing into new highs right and as those pushed into new highs. Over in here. As well as prior to the markets selling off in December so hard the we saw the. Utilities pushing into new highs we saw the market selloff drive sideways and then it broke down we’re not saying that is happening now we do have we zoom in we do have the utilities. At new highs. The difference may be that we have gone through some of that sideways action. Here on the on the S. and P. and have broken out of that so again that’s why the areas we just looked at become very important on for the S. and P. on those highs on the S. and P. so. Watch out you tell these they may be a leading indicator some people would like to argue that but there’s been some studies on there that. Are pretty interesting okay with that let’s. Go to some stocks so apple was very strong early on the early going even after the announcement apple is doing fairly well it since then like right well we pointed out when they when the market sells off hard there’s a tendency for a lot of things to pull down. It doesn’t mean every stock is going to come down. But it it could mean there could be a little bit of intraday. Fluctuation these the interesting thing with apple. Is going to be pulled down this. Volume. It’s not a fact I’m going to well just leave it on there. The interesting thing with apple as its get a horizontal line down here in the drawing set in the lower right hand corner underneath the chat charts. And we’ll put that line in there. The interesting thing with apple is we’re breaking out of their short term consolidation and we look at this on a say a five year weekly chart sewer apple as well we can see were very near these all time highs with apple’s it tries to break into that area. Now what do we do with apple. If we don’t own apple in and look and we do own apple as a matter of fact. In the- active trading strategies if you wanted to if you were looking for this to be an opportunity to buy more apple but then didn’t want to didn’t want to jump right out there and buy it right now one of the things you could do with apple is you could sell a cash secured put on apple somewhere in this in the lower ranges here now before we do that why would we but what are some of the advantages of a cash secured puts well it it gives you the ability to start paying attention. Yet eight when you when you’re selling a cash secured put what occurred. Yeah. What occurs is that you will. Obligate yourself to buy X. amount of shares of whatever the underlying stock is in this in this instance it’s apple so the underlying stop stock is apple we may look at this you know something. If we look at the stock trading at two twenty four right now you could you could go as far down as to seventeen in and pick up. A sell it sell cash secured put for a hundred shares here’s a hundred multiplier here. Of stock. Because you’ve sold this put I’m just gonna left click on the bid you sold this put that obligate you to buy the stock should somebody want you to do that should somebody and owner of that stock this says I want to sell my apple shares to somebody and they own the put their along the put and you’ve sold the put they do you have the obligation through a- of a random spin of the wheel. If it comes up your name you will end up happening though share stock so you have to have the dollars to buy a two hundred and a two hundred and twenty five dollars stock. Hundred two hundred twenty five dollars stock. Now the thing about that is well you could say well I just put in a limit order. Down here to seventeen to buy the stock. Which really is if we look at two seventeen half right there that’s about we’re support should come in. And we’re people like to buy support. What is the chance of the stock breaking down fairly high breaking down below where it is right now probably fairly high in. A market that’s been going up for a long long time but that doesn’t mean that apple is something you may not want to accumulate along the way. So buy low sell high looking for it to pull back in. You get a premium for that versus putting in a limit order if apple takes off use your premium. It you still have that premium did and it at some point. That may change your P. and L. to the positive side. Verses A not getting filled on your stock so there’s some advantage advantages to that let’s look at something else today. And come over here and let’s look at the VIX and. We just put it up on the chart here so if we look at the VIX today the volatility index the volatility index today is up. So we’ve got the VIX rising so we’re there’s a higher premium associated typically with a lot of stocks out there apple probably being one of them. And so you can sell it we talked about. Probability is we’ve talked about pricing of options of all please part of that pricing of that option and therefore. Apple may be selling at more of a premium on these puts in this just seventeen days out seventeen days out so we’re not giving it a lot of time to break down extremely hard at the same time if it does break an extremely hard we don’t have enough time for it to come back. And give us a better out if you choose you don’t want to buy apple so what we’re gonna do here is I’m gonna hit confirm and send we go sell one contract. Sell one contract of apple puts a at a limit order of two fifteen on a day order we leave it at a day order we can move it to the mid price which is. To fifteen to fourteen you got a penny in there. Noon you know. I’m not one to be worried too terribly much about a penny. At depends on you don’t try don’t give up too much on something that has a wide spread if I can grab that. That we’ve got a transaction fees go along with that and there we go we’re gonna send this off. And bone. Now we have. Apple now I may I. Went too fast I put it. In a different group we’re gonna come down here to unallocated. And that’s where it is I’m gonna right click on apple and I’m gonna. Move it to the growth are to the active trading strategies. Active trading strategies okay. There we go now we’ve got short put we’re willing to own three hundred shares of apple. We’ll see what what occurs that’s how you that’s how that has to go you have to be willing you have to have the money. Only willing but you have to have the ability. To pay for those shares of stock when you’re selling. A cash secured put. Just looking over our- are a stocks for the day that we have in this group and you can see apple is the lion’s share with on this is been known for a long long time lots of different things went on around this trade as far as options and stuff Cabey H. Cabey homes. Trying to get us back to break even but really nothing radically has changed. In these E. I. X. is a call we put on the other day. And it is not acting well it. Is you is a utility is a matter of fact again. The reason we put that on. Last week is we were looking at you tell these strengthening and everything is weakening the day the scene this break down below here not necessarily a surprise now we bought. If we look at this there is a- hundred and eight days. Of call option so we’ve got a hundred eight days before expiration on that so. Not going to worry too much at some point if this is trading around a dollar fifty or something you may decide. To exit out because at that point if it’s trading at a dollar fifty it’s going to have to get gain over two hundred percent. Just to get back to. Our gain over a 150% just to get back to break even. All right let me see here. When you mean at what is Alli where’s alley going. Let’s see. I’m not sure what this means you’re gonna miss media’s know something that I don’t know I only. Let’s see here but anyway call put condors about blah blah on let’s see here. All right. So with that everybody has their own opinions about things everybody has their own ways of doing things you need to find out and figure out what works best for you and that is within your own risk parameters so remember that all right let’s go back up to the charts and let’s move this way and so we have radian group radian group was a is was. Earlier in the day now when we think about we think about the. Certain six does certain strategies one of the things we look at from a technical basis is are we uptrending are we down trending in the case of. Radian group we are. Pointing up. In case of I draw these lines in here now there’s an apex to this coil somewhere out here in time. And right now we’re about two thirds of the way from that from a textbook standpoint that supposedly the optimum place one of the 50% to two thirds the way. The optimum place for this to break out if this breaks to the downside. The question becomes is that just going to be a fake out and shake some people out and then rolled back to the upside. Who knows if you. A so here’s something to think of. I want you to think about this. Pretty hard in that is. If you are have a bullish bias if you have a bullish bias should you be doing anything bearish right if in a strong bull market you are bullish and a strong bear market you don’t like it you’re just bullish then you’re going to have to figure out how to find bullish stocks or be protected or you know step to the sidelines catch you got to know what you want to do so if you’re bullish. And this breaks and if you have a bullish bias just in your blood and this breaks to the downside then you profit then maybe you shouldn’t do something that’s up to you. But if you’re looking if you do have that bullish bias and it gives you a reason to buy into day we had a. What we call CAHOLD. Our was looking like a CAHOLD and I’m just going to draw a box or a line next to it where it had a price had moved that the this this. Candlestick this inverted hammer that we have here near support today really was trading up at this horizontal line I just drew so we’re trading all the way up there. If that is there at the end of the day above this low today that were in some people’s mind is contained a continuation of this uptrend and they may take a trade on that. And so to do that you know perhaps a look at this and say well what’s the high there and the high is. Sitting at. Twenty three twenty four. And if the market decides to turn and run back to the upside today if it decides to turn a run back the- it may take radian group. Along with that let’s look at this on a on the analyze on the analyze tab and fundamentals. And it’s in the IT’s that’s apple. Sorry I was actually a little bit surprised yes in the financials and what we seen it with financials or not they’re not doing so well but it is in mortgage insurance. Products services related to mortgage and finance industries so we got financial but it’s in a sector that. Is that has been doing well and you know may hold up. Over the over longer so we’re gonna do is we’re gonna look at yesterday’s high your stay high is twenty three twenty four some people would buy and a close above that high. And so with some at some number it could be ten fifteen twenty fifty cents whatever today for this example we’re going to use twenty cents above. Twenty three twenty four so twenty three forty four. And exit at. A. At below today’s low so twenty five three forty four and X. ability to below yesterday’s low excuse me. Of twenty to seventy eight so well exit at. Thirty cents below that so. Twenty two twenty two what is at forty eight yeah. Forty eight twenty two forty eight and. Twenty twenty three forty four so many come over here to the trade tab with already and we’re in a right click. And we’ll buy. We’ll just set this up for example on a hundred shares. And so we’ve got a buy. Above yesterday’s above the market where the market’s trading now and we’re gonna buy this at twenty three forty four so we’re going to zoom in on this. Twenty three point four four and we’re gonna sell will and was going to change this to a- stop order SO a buy. Stop order which is a market order above at or above twenty three forty four good till cancel okay good till cancel because yesterday’s low. We’re gonna look for the trough on explain that. In a more in a second but yesterday’s trough. We’ll look at at at that and then at the same time I’m gonna come over here and I’m gonna right click and I’m going to create. An opposite ups. Create a. Duplicate no apparently not. When the storm what I want to do. Now did the first thing I want to do is I’m going to come down here to single order and make a sequence so single first trigger sequence is where I’m putting it at so first trigger sequence and then right click and ornate created opposite order sell one hundred shares are going to. Sell it at twenty two. Four eight. A very tight stop we’re not messing around here the market’s not necessarily acting great but if it does start to move we want to be in there. And it’s going to be a stop loss. At or below twenty to forty eight good till cancel and then we’ll hit confirm and send. And double check everything and we’ll send that off okay. Real quickly. The reason what we did you can see our order in here we’re just trying to identify. A close above the low days high and so in this series here. Yesterday was the lowest day it printed the lowest price of the last six days so we would some people want to look at a close above that price. It before they make a decision and what are they what are the what are they doing they’re just trying to define. A trough or the beginning of a trough is that mean it’s going to go up on a percent no it does not okay. So there’s that one. Let’s move on E. I. X. and new all okay. I knew all no. Is this one’s interesting why because it’s been in a long term. Downtrend. And that’s important because how things act there’s different you know stages and phases of trends and right here. And you’ve heard me talk about this before if we look on this weekly chart. Seven get that zero. Right there we saw the- stop price start to drift sideways very important and then it makes it makes a low right in here and then it pierced that low right so that low shook some people out. And then we held member be talking about when we start to see a start to see things strengthen we held the next dip into their so let’s bring in that one year chart real quick and we saw things strengthen a sharp selloff and then followed by on earnings a big push to the upside. Now what were the. What the I might see is in the past whenever it’s gotten up to its- its resistance area. It’s had a tendency to weaken right we can look at that to. That we can look at that. Little bit of a downtrend before it sold off hard. And then on this rally it hits. It hits the resistance area and as it hits that resistance area this time. It held up. So we call that a sign of strength I’d I tweeted that out yesterday morning on this gap to the upside again the big reason the market may be holding this down a little bit. With this one may be starting to run so we have these different phases of sideways action and then there’s different stages. Of uptrend right and the stage one of the uptrend happens inside. And carries on out to the outside and then stage to happens that’s where most of your foot trend followers dive in. On stage to so. This one’s an eighteen dollar stock new brands you might norm is Rubbermaid and a and a few other things sharpie. I think they still own sure the sharpie the they were selling some things off that it didn’t think they needed. Which is what’s help them what’s help price move higher. So here again this one’s by this one’s really kind of a break out and a gap to the upside. It’s not necessarily a close above the high of the low day so this is gonna be more of a trend trade. So we’ll look at the most recent low right here nine a nine twenty three Monday the twenty third of September. And that low was seventeen fifty seven. And so one seven point. Oops one seven five seven. Times point nine seven if we look at this as a trend trade us that the stop is going to be seventeen dollars. And thirty nine cents. So what we’ll do here is a man. Over to the trade tab. Put in new all. And we’re gonna right right click this time and we’re gonna buy custom with the stop the ideas were looking for stage to type of a trend but we’re gonna legs exit out at seventeen dollars and four cents 3% below the most recent swing low we’ll go back and look at that real quick so one seven point oh four is going to be our stop. That’s going to be a good till cancel we’ll look to buy it pretty much where it is right now and we’ll we’ll send that off the bid ask spread on these or penny tight so there’s a lot of seemingly a lot of a focus here will actually move up. The amount of shares we own on this one. And start off with two hundred and see if we can’t track that going four to maybe add to that position as the train gets rolling. Hit confirm and send. We were looking to buy at a limit sell on the stop. The stop is no guarantee that you will. Remember those stops we put into stops are no guarantee whatsoever that those will protect you. At that price where you want to exit out at it could it could exit a lot lower you could exit a lot lower than where it is. They just a market order please remember that. And we’ll send that off. Okay. Okay Diana stick with us as a matter of fact you can see it so why do I am. I am I am made of major faux pas if you are new thank you very much Dan for being here thank you are Diane. A new glasses thank you very much Diane for being here new stuff new stuff in the webcast you can go to the education tab and you can click on. Our webcast right here so click on webcasts in in these webcasts. There’s upcoming events and those are going there will be there will be getting started with stocks. There’s a getting started with options so the archived webcast is another place you can come in here click on archives you can select your instructor I prefer Pat Mulally myself. And find everything that I’ve done if you want to learn more about the conviction indicator then you would come back in two nine thirteen and learn more about that you want to learn more about our site you can come down to. Maybe that was nine thirteen. Yeah RSI you can come in to nine oh six and learn more about our site lots of different things there but getting started with stocks on Monday with Cameron may getting started with options on Fridays with Barbara. Armstrong so please don’t hesitate to join them up next today is technically some are yet technically speaking so you can see is more technical analysis and they may make some trades in there and that is going to be Connie hill. Charter market technician. Wonderful wonderful trader so get with Connie in about thirty minutes with that we will. End for the day again the today everything we do. Remember that we everything we’ve done is for educational purposes only is your decision that you make in your self directed account and in summary markets tell us something but until they break major areas then we’ll we’ll we’ll kind of stay stay the course right now we’ve got weakness and two of the indexes. That could drag one down a really strong bounce good news could drag everything right back up so stay tuned and stay focused on your portfolio. Thanks everyone we’ll talk to you soon

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