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On the last update, we noted how we were overbought in the medium term. Markets continued to grind up the last couple of sessions and big whoop -- that is what happens when you try to fade a complete 180 shift in sentiment. I still remember getting laughed for recommending purchasing SPY in June. Fading trends is tough. I still believe that while buying now will ultimately be profitable in the long term, tactically it is just the opposite of what I think needs to be done. We are into the risk levels on the 13 Sequential though, as well as the weekly/monthly range projections on SPY. Buying 430 is too much risk for me.
The best trade here, if one is already long, is to press longs on dips until the end of the year. This is fundamentally different from initiating a new position. If one is in mostly cash, well unfortunately you have to pay the price for your blunder (scale into longs without the benefit of having a superior cost average). As the 10-year yield sits below 3%, I think that longs should play out well and this thesis has been the main backdrop for most of our tactical trading in the Discord group.
Speaking of, we took a couple of trades today. I bought COP on the dead ass lows after it opened down big and hit the DeMARK weekly range projection to the tick. I thought the risk reward was too good. This was an instant 2.6% win which we trimmed near the high of days. Nice hold of the TD Ask Level from the 9 as well. This means that the 13 sequential should complete and we will be waiting for a 13 sell in order to sell the balance. This could easily shape up to a 20-30% winner.
There was one more trade, but you can go to the Discord and check it out yourself.
COP just broke 100 and still could have a decent run from here.
XLE/SPY ratio just needs to hold this range
Check out some of the ratios starting to flip in the cybersecurity speace
AAPL and TSLA should be on the top of everyone's lists for longs. Microsoft should be shorted against the basket.
TSLA coiling up for the big run
Guess what, so is META
Focus on these simple plays and life will be easier. The tl;dr is 330 SPY is coming into resistance which we are looking to hedge but be long these leaders regardless on pullbacks.