one of the better looking active short trades. IACI still offers an objective short entry or add-on at current levels with a 9% profit potential to T1 and 29% profit potential to T2 (my preferred target). daily & weekly charts show. i have slightly re-draw the channel on the weekly chart from the previous post.
fyi- SBUX is trading up substantially in pre-market trading following their earnings release last night (current price 50.71). today’s pop doesn’t change the technical outlook on the stock although the suggested stop on this trade remains as previous posted around the 52.12 area so one to keep an eye on today.
I’ve made a brief instructional video on how to best view the chart images posted on the site, which includes instructions on how to further zoom and enlarge the charts after they are initially expanded. I also wanted to mention that I’ve had some feedback from users of the site who have had a difficult time making out the details on the charts due to the black background that I use.
I prefer black backgrounds as I typically spend 8-10+ hours a day looking at various charts and black is much easier on the eyes than white background charts. Therefore, I recently increased the brightness/contrast on candlestick and recent trendlines on my chart settings so that should help. Also note that I do have the contrast on some features such as moving averages, old trendlines, histograms, etc.. set very low intentionally as I prefer to highlight mainly the salient features of each chart. If I do think that a particular moving average, indicator, histogram, etc.. is relevant to a trade, I will increase the contrast on before taking a screen capture of the chart before posting it.
With that being said, please let me know if you are having any issues with viewing the chart images posted here and I’ll make every effort to fix the issue, including switching to light or white background for posted charts if I receive enough requests to do so.
the ROST short trade has hit T2 so consider taking partial or full profits and/or lowering your stops. this is one of many examples of how the trades listed with multiple targets will usually experience a temporary reaction (pause and/or bounce) off the first target level before breaking above (on longs) or below (on shorts) that level before prices resume their previous trend, typically in an impulsive fashion once that support/resistance level is taken out (as highlighted on the updated chart below). previous charts on this trade shown as well. T4 remains my preferred swing target on this trade.
remember: traders should have a plan and stick with that plan unless the charts and market action have convinced you to change or alter your trading plan. from experience, i know that days like today make those short second-guess their positioning and help reinforce the bullishness to those who are positioned long. to me, i see a great opportunity to add onto my favorite short positions at great prices. on oct 19th, as the Q’s had just broken down from the ascending broadening wedge pattern, i posted (along with the 4 hour QQQ chart): “if this breakdown today sticks, my expectations are that the Q’s find some support on T1 (pause or a bounce)”.
well, that is exactly what is happening so far. i then stated a few days later, as T1 was first hit on the 23th: “as usual, most of the early targets are put in place as i believe those levels to be significant enough support to likely cause a reaction (bounce). those levels are also useful for active traders that prefer booking quick profits while the higher targets are typically for longer-term swing traders. how far this bounces goes is hard to say but i will dig into the intraday charts and some other market metrics to try to determine that. i do not expect this bounce to be very large in time or scope. “
as of now, when i look at the charts, nothing has changed my opinion or expectations on how the market will play out going forward. actually, the very fact that we ARE bouncing here only helps solidify that my primary scenario (much more downside over the next few weeks/month) will play out because this bounce was called for weeks in advance and has been part of that scenario for months now. i don’t have a very solid read on the shorter-term time frames as to exactly how much further in time or price this bounce might go but my best guess is that it is very limited on both metrics at this point.
with all that being said, i am aware that sometimes my market scenarios play out and other times they don’t. therefore, i remain vigilant for any technical evidence that calls into question my primary scenario. one such event that would do so would be a solid move above this R1 zone on this SPY daily chart below.