Hey everyone, Robert Roy of WealthBuildersHQ.com. Welcome to this edition of Trade With Rob which is for August 10, 2021. Markets just closed up, so let’s go take a look at what’s going on.
Keep in mind that everything we look at is for educational purposes only. Nothing is intended to be advice and/or recommendation.
Let’s take a look at the S&P 500. We closed here on Monday, had a nice gap up and gave it all back. We closed the window. We vacillated a little bit. Moved up higher, but it was a lower high. We kind of dropped off and went sideways through lunchtime, quick little snap down and back up – lower highs again, and lower lows. A little head-fake there with that low, but we continued to push down with a lower low, but closed up strong with the last candle of the day, and ended about 4.5 points to the upside on the S&P 500. So overall, not too bad.
So that candidate today is a little bit different from what we normally do, and we’re going to look at the QQQ.
The pink line is the 8 EMA, and it’s sitting just above the blue Fib line which is our zero-line. We’ve moved out from the blue line already here multiple times.
Here we had a quick breakout, and came right back down. Here we had a close, a retest, and the a gap down so no trade was taken there. We pushed up, “here, kitty kitty,” and came back down yet again. This day, we actually came and retested, bounced and retested, and we failed off of there. So, we have not been able to move up to the 372.16 level (371 would be our target).
What I am looking for in an ideal world is a retest of that 365.47 level which is the zero-line. What does that retest mean? That means either a pull down to that zero-line, close and bounce, or intraday, depending on your risk profile, you take the bounce off of that 365.47 level.
We get the bounce, we’re going to take the bullish entry – buying the stock, buying a call, bull-put spread – whatever you want to do for a bullish trade. We’re going to do it with call options. If we take the entry, we get the pullback and bounce and take the entry, our stop is down here at 362.50. Our first target is here at 371. If we hit our first target, we’re going to move our stop up to breakeven or a little bit more than breakeven. At that point, our second stop is at the 377.50 level.
So, what are we doing here? You’re selling half of the trade at target 1, moving your stop, selling the second half of your trade if it hits resistance. If it backs off, because you’ve set your stop just above breakeven, you’re at a point where it’s not costing anything in your trade – first half had a profit, second half was a wash, a little bit up, a little bit down, it’s a wash, and your good to go.
Not all trade will make it to that second level. Sometimes you’ll get a runner. Some of the ones you’ve seen have exploded past there.
I’m going to be teaching an advanced technique, live in New York on September 17th which is called “Charting Your Way To Success.” It’s a $99 event. Go ahead and check it out here.
It’s a great opportunity to rub elbows with some of the best traders out there.