My 200th post!! And NCAA college basketball fever is at a fever pitch. The Elite
8 will now fight it out for the Final Four and my favorite team Michigan State
(MSU) is going all the way, so I hope. Warren Buffet threw out a Billion dollar
challenge knowing that the odds of winning a perfect bracket are so low it is a
sure bet that no one will win. In trading there are no sure bets. We try to
place odds in our favor, cutting losses quickly and letting winners run. I am
mindful of the saying “Sell in May and go away”. Coming back long in October or
November is the best. Maybe the rich get hefty bonuses early in the year
through April and then the buying dries up. I remind myself that mine is not to
reason but to observe my charts and act based on the chart data. Let me start
of by saying that my base trading systems are showing some sell signals on DIA
(Dow Jones 30 ETF), SPY (S&P 500) and QQQ (Nasdaq 100). My tried and true
ICE system on SPY is still long. I am showing a chart of SPY below. My trades
for these is to sell vertical call options spreads for credit for the next
month just above the resistance level, which represents the high over the last
three months. Right now it is a slow grind. If the funds go sideways or go down
in the next month, the vertical call spreads will end worthless and I would
have taken advantage of time decay on the options. If the funds jump upwards, I
may close them out and sell more further out as long as the directional signal
remains down.
I have selected a few stocks in diverse sectors and applied
back testing with my top 30 trading systems. After carefully analyzing the
results I am now trading these in their own pattern using the trading systems
that yielded the best results. Which of these will be stars like MSU? Which
ones will disappoint like Ohio
State
The US
stock market has paused but we are still not sure whether it will move back up
or tumble down for a correction. That means I will continue to trade the stocks
I have pre-selected for quick in and out trading.
The first one I will show is GD General Dynamics. I had
several good trades in a row. These are quick in and outs and trade duration is
3-8 days and typical gain is 1-3%. I have decided to only enter the long
signals when I see a down trend with buy stops above the previous bar’s high.
Otherwise in a typical long trending mode I enter market open next day, and I
place my trades the previous night. See chart below.
Another one I am trading is SU (Suncor Energy). This one I
am trading with straight put or call options as I have noticed that the options
have a tight spread between bid and ask and I want to take full advantage of
the directional move risking only the value of the options. I am currently
showing a long signal so I am long call options that are at-the-money and about
3-4 months out.
March Madness… Florida Gators is looking strong, although I
would prefer MSU, Michigan or Kentucky to win. How do
I pick stock winners? Based on their track
record, back testing and with tried and true trading systems.
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