By: Tom Gentile
on September 6th, 2023
August has been what I have been calling a pullback month.
The markets for the year have been performing really well. Since the March lows it has gained in price until the peak this month.
In the chart image below, you can see I have a trend channel of sorts drawn in to signify the pull back that the month has seen.
My assessment is the pivot low of the month at 340 is a pivot support.
So long as the DIA, (ETF for the Dow Jones Industrial Average, stays above that pivot point I see it trading higher. I could see it trading back up to its highs.
— Tom Gentile
C1P: Chief 1-Percenter
Market in Focus: DIA – aka the ‘Diamonds’: SPDR Dow Jones Industrial Average ETF Trust
This again is the year-to-date (YTD) candle chart of the DIA and I have added on the Fibonacci Retracement Tool for context of where support may have already been established.
The Fib takes the closing low price of a date range and connects a line to the closing high of that same range.
It then calculates percentage retracement percentages (based on the Fibonacci sequence).
If enough investors and traders use the Fib’s and make buying and selling decisions based on them, they become a self-fulfilling prophecy.
The 38.2% Fib level was hit, and DIA has bounced up from it, making it another reason I wouldn’t be surprised for the DIA going higher.
Power Profit Podcast
My friend and trading colleague Chris Johnson and I run weekly Podcasts on the financial markets called Power Profit Podcast.
This is a great resource of information for Options Traders.
Below is the link to our latest one that you can find on my YouTube Channel: https://www.youtube.com/@TomGentileTrader
Feel free to pop on in there and subscribe for free to get notifications whenever more become available.
The latest Power Profit Podcast link: https://www.youtube.com/watch?v=pCAS1amNDZc, or watch below:
In it we discuss many items.
In or around the 6-minute mark I ask Chris about his take on Bank stocks, and he followed up with some commentary on them, especially the Regional Banks stocks.
One thing I’d like to encourage all you listening to the podcasts and that also have the tools.
When he or I or both of us are talking about a specific stock or sector of stocks utilize the tools to search up any number of scans to see if they are making the results lists of those scans as a way to search up possible options trades for consideration.
Case in point.
I looked up in the tools under the Money Calendar scan to see if there was a banking stock, specifically a regional bank that made it on to that scan for today.
Sure enough, there is.
FITB is the ticker for a regional bank called Fifth Third Bancorp.
Look at the bullish data for FITB with a start date for today.
The first observation is the accuracy of 90%.
This means that 9 out of the past 10 years over the date range shown it has trade higher.
The range of the pattern is for a start date of today and an end date of Sept. 15, 2023.
The average profitable or price move over this range for FITB is $0.63.
That may not seem like a lot, but if you zoom in to the more recent years you can see a better than $0.63 price move.
Add the P/L for those 4-years and divide it by 4 and you get a higher than $0.63 average move. It ends up more around $1.50.
One can then go into the tools option chain and look up and see what the options with an expiration just past the end date of Sept. 15 are priced for and check the possible percentage roi on that option with a move $1.50 higher.
My team and I have taught how to do that numerous times and take a look at the Risk Graph 3-part series of video trainings in the tools library to help with that.
— Tom Gentile
C1P: Chief 1-Percenter
Stock and options trading has large potential rewards, but also large potential risk.
You must be aware of the risks and be willing to accept them in order to invest in the stock and options market. Do not trade with money you cannot afford to lose.
This is neither an offer to buy/sell/ or recommend a particular stock or option.
Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been actually executed, the results may have under or overcompensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with hindsight.
No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.
Disclaimer of Warranties and Liabilities Tom Gentile and TomsTradingRoom, LLC including employees, consultants, and editors (“Publisher”) cannot and do not warrant the completeness or accuracy of the content found in our areas, or its usefulness for any particular purpose.
Tom Gentile and TomsTradingRoom, LLC also make no promises that our content or the service itself will be delivered to you uninterrupted, timely, secure, or error-free. Under no circumstances will Tom Gentile and TomsTradingRoom, LLC be liable for direct, indirect, incidental, or any other type of damages resulting from your use or downloading of any content on our site.
This includes, but is in no way limited to, loss or injury caused in whole or in part by our negligence or by anything beyond our control in creating or delivering any portion of Tom Gentile and TomsTradingRoom, LLC.
You are agreeing that you bear responsibility for your own investment research and investment decisions. You also agree that Tom Gentile and TomsTradingRoom, LLC will not be liable for any investment decision made or action taken by you, or others based upon reliance on news, information, or any other material published by Tom Gentile and TomsTradingRoom, LLC.
Tom Gentile and TomsTradingRoom, LLC relies on various sources of information that we believe to be accurate and reliable. However, we make no claims or representations as to the accuracy, completeness, or truth of any material contained on our site.
Tom Gentile and TomsTradingRoom, LLC are educational portals, providing content for educational and informational purposes only. Neither Tom Gentile nor TomsTradingRoom, LLC are a broker/dealer. Investors need a broker to trade stocks and options and must meet certain requirements. All securities, futures, and investments data and ideas are offered to self-directed investors. All prices in USD unless noted otherwise.
A full disclaimer can be found here: http://www.tomgentile.com/legal_disclaimers.html.