May 16th, 2023
Rank: B
1. PACW and WAL were grinding up the past 2 days and PACW had a big drop at the end of the day that dragged the ES with it. In the after hours WAL had a very large spike and there was no news whatsoever but obviously something had happened.
2. TA/Review
- PACW WAL both trending up for the last 2 days then out of nowhere PACW broke down strong and took the spy with it. This was somewhat of a missed opp because I did not see it and if I had been watching PACW I may have gone short the ES and the end of day gave about a 20 point move to the downside so that was probably the much better breaking news trade. In the after hours WAL spiked strong and I thought ES would follow.
- Got long just looking for a small scalp to the upside. It worked nicely.
Idea: Great, seeing WAL move like that in AH is a decent enough of an idea to get long MES simply because we moved down heavily from PACW and WAL is a bigger bank with more assets so if WAL moves up that much in AH then this large downmove caused by PACW will be slightly negated. I was only looking for a small win and I got like 3 points on it so that is the definition of small win. There was hardly any followthrough though so I am glad I got out where I did.
Execution: Great little single
May 5th, 2023
1. Fundamentals
- This was pretty much a continuation of the previous days breaking news. As we opened today WAL PACW recovered well from their bottoms falling out. BAC and JPM also broke back above the panic sellooff highs. AAPL also had good earnings and was up nearly 5% in the session. KRE held up nicely.
2. Technical Analysis
10d:30m
- Large breakout of the 30m downtrending channel. Also breakout above the JWAP (Jerome anchored vwap) and the WTD and MTD anchored vwaps
1d:5m
- Again really nice breakout continuation here from the 30m downchannel. Perfect ORB strategy as well.
May 4th, 2023
1. Fundamentals
- The basics of this entire strategy is that when news comes out into the market, a fundamental shift can occur very very fast. If you think about the market, it is a future prediction model. We dont care about what is happening now, we care about what CAN happen in the future. When we get big bank run fears like we currently have, that is a major tailend risk that has to be priced into the market. For now the entire market gives zero shits about the banking crisis. We had a period in march where we were red about 8 days from FRC SIVB then 8 days later we ate that move right back higher. Today is the day after FOMC and JP said that he is expecting inflation to stay high for a while so the chances of a pivot coming soon seemed to be pushed down the road. For that reason the market sold off about .75%. It was not that crazy of a move. The real move happened in after hours when we dropped an additional 0.75% because of WAL and PACW fears of bankruptcy or an acquisition. When the market opened I was ready to look for the continuation of selling from the previous days session. WAL PACW had news that they were exploring the idea of a sale occurring. At the open WAL halted down and PACW was following. I took a short continuation trade on this news and about an hour after that trade, I flipped my bias solely because WAL released an article saying that the entire story of a "sale" was fabricated.
1st Trade (Short)
2. Technical Analysis
10d:30m
- We have a clean downtrend on the 30m here in a channel. The FOMC high was the day prior and we had the 40 point after hours move lower from WAL PACW bank run fears. The premarket put in a clean lower high (red arrow) and then shortly after this we broke to LOD which was also below yesterdays after hours low.
2d:10m (WAL)
2d:10m (PACW)
- Extreme moves here on PACW WAL. Down about 45% at open on PACW and about 20% on WAL. After the open WAL dropped an additional 56% from the opening price and PACW fell about 30%
2d:10m (KRE) (Regional Bank ETF)
- Again major moves here on regionals
- VOLD was red -2 and decreasing steadily, ADD (major tell) was droping with gaps pretty early on into the open which was my favorite and best indicator in terms of immediate price action, TICK holding below 0 until about 9:40 but nearly every red value is in -600s but all positive values are below +600.
3. Strategy
1d:5m
- This little flag was a clean spot to take the short. We were using premarket low as resistance and holding below the 9ema with zero candle closures above it.
1d:5m
- Entry and Exit
30d:30m
- The exit level on this trade was the break to the new low which was coinciding with the previous higher low from last week. If we overtook this level quickly I couldve kept trading the downtrend because it wouldve been very strong. For that reason I was willing to take my profits somewhat fast into the breakdown. I was not going to bet on a big break of this level given FOMC was yesterday and we moved down pretty large 2 days prior. In hindsight, taking my profits there was the right move. In the moment, I was not so sure.
4. Review
Trade Ideas: A
- I was aware of WAL breaking to new lows down 60% and PACW doing similar. KRE was ripping to new lows from yesterdays major drop and was down about 10% itself. JPM BAC all breaking to new lows as well. ADD falling off a cliff, TICK below 0 and ton of values below -600, VOLD was at -2.5 and decreasing steadily. For all of these reasons I was ready for the continuation short via the flag pattern. I think combining all of these reasons together just makes this trade that much more likely to occur. I think that maybe an example like this could warrant bigger size. If we have this many variables pointing in the same direction with clear catalyst and not just a weird ranging market like we have had the past few months, then its time to size into these moves.
Execution: A
- I took the break of the flag and held through about 3 points of drawdown but each move was still a lower high. I took profits at 4069 because the low from last week was 4068 and I was not expecting us to fly throught that level quickly, and if we did I could trade it anyways and there was no reason to have fomo. I think the entry was decent and the exit was beautiful. Taking those profits and watching it rip back up to my entry a mere 30 minutes later was pretty satisfying. I think possibly I couldve gotten in a lot earlier but trading that close to the open was never my thing so ill let it go.
Mindset: A
- When I entered the trade I felt pretty calm and composed. I think adding up all the variables in my head really aids in that calmness. I like knowing that I am most likely on the right side of the trend.
2nd Trade (Long)
1. Fundamentals
- WAL announced that it was NOT looking for a sale which was the entire reason it was halting down in the first place.
2. Technical Analysis/Strategy
- We were heavily red on SPY from yesterdays move and the entire move was caused by WAL PACW fears of bankruptcy or a sale. If that fear of a sale was the majority of the cause of fear then if the sale was not happening perhaps the fear may subside and we move slightly higher?
- This strategy is meant to be only a scalp and not a long hold. We have no idea what kind of impact news can have and more often than not, its wrong anyway. I wanted to only catch a quick sentiment shift for a small scalp.
1d:10m
- When WAL announced it was NOT looking for a sale we had a 70% instant jump in stock price. When this occurred I was watching JPM and BAC to see if they were going to hold higher lows for a push higher. Regional banks are fueling this move yes, but the larger players must follow if we want the entire market to also follow.
1d:5m
- I was carefully watching JPM to see if it would have any candle closures above these small "higher lows" on the smaller timeframes.
1d:5m
- Same thing with BAC. Will it hold higher lows and have thrust off this level?
- At this same time ADD put in this beautiful candle and the TICK put in this +1000 value which was the first of the day.
1d:5m
- As I am watching JPM BAC both hold higher lows and ADD/TICK spike, ontop of WAL making a +70% move in seconds. I grabbed a long with my risk being the break of the bottom of the wick (only because we are still in such a major downtrend).
3. Trade Report Card
Trade Idea: A
- The idea on this trade was SPOT on. I heard the news, realized how important this was in terms of us breaking through the support at 4068, and understood that we should get a clean sentiment shift scalp opportunity based on breaking news. I was not hesitant but also not too aggressive. I waited for JPM BAC to make higher lows and hold and I knew that if they did that then the SPY would follow for just a simple small push higher (nothing crazy).
Execution: C-
- When I entered this trade I was looking to hold for the break of the previous lower high at 4083. Instead of holding to that predetermined level I sold about 5 points beforehand. I hate when I have a decent trade planned and I dont stick to that predetermined plan. I stuck to my risk level but why did I not stick to my target? Perhaps since I had a nice 12 point winner before this trade I wanted to take profits fast. Trading the PnL is never a good idea and I know that. Perhaps I didnt have enough confidence in the trade to actually break to that 4083 level. I have been trying to train my brain for the past 1 year to blindly follow the trend because I am alike all other retail traders where I love the reversals. They are so juicy looking because the R is good but who cares about the R when you only catch the move 15% of the time. I have to find that balance of trusting the trend but also trusting my system.
Mindset: A
- I came into the market quite prepared for a down move. I was confident in my ability to identify opportunities and I was confident in my ability to execute on those opportunities. Its always a lot easier to talk about mindset on the easy days where I get a clean 16 points on the table. The red days are the hard ones. I think going through and creating playbooks for every strategy I have has already helped me a lot in realizing when its worth it to trade or not. This week I only placed 3 total trades which is awesome because the only reason I avoided all the normal bad setups I take is because I have the good ones actually identified. I think this could be a big difference in my confidence level going forward just being totally aware of all of the parameters of all my strategies.
