Hurricane Milton Has Me Hunkering Down This Week

ℹ️ This article was previously published in our newsletter. Subscribe for early access!

If you have heard from me anytime this week you know I am hunkering down with my wife, many family members and extended family at my boarded-up compound as I am calling it this week.

If you’re worried about me, DONT. First we are high and dry, and the family and I have prepped for everything, including the aftermath.   

My right-hand man Jay Harris is going to take the Tools and Observation section for me/us this week.

As for the markets, I am taking a bit of solace knowing the SPY is closing in on my already assessed target of $580.

Market in Focus – SPDR S&P 500 ETF Trust (SPY)

The S&P500 is experiencing an all-time high right now on an intraday basis.

If it holds that would be a bullish result. It is right now and even if it doesn’t hold but maintains a price level up here that would still be deemed bullish.

I’ve spoken about a target of $580 on SPY and if it continues making new highs that $580 may get hit.

I make note in the chart above that the top of the TAPP (Time and Price Projection) zone of $585 is even a possibility.

Is this the time to sell? Or will it be when it gets to those higher price levels?

Maybe, but it seems the markets are going to stay resilient at least until the November 4th election. Unless of course, a curve ball economic report comes out of nowhere to shock the Fed.

Tools and Observations –  A Top-Down Approach with Candlesticks

Hi everyone – grateful to share a bit of insight on a process I/we take when going through the 3-step process Tom has trained us on for options trading and that is…

1. Spot Opportunity
2. Build an Acceptable Risk Option Trade and
3. Manage the Trade

I will focus on the first step in the process and that is searching for an opportunity aka finding a stock or ETF to consider an option trade on.

When we say Top-down we are speaking about doing our technical analysis on the Big Three indexes: Dow, NADAQ and S&P 500. Then stepping down to analyze sectors and then stocks in those sectors.

With the tools we use the DIA, QQQ and the SPY which is the ETF of the S&P 500 or (SPX).

I have created a list of the Big Three  and it has DIA, QQQ and SPX and I also have SPY in there. I could have NDX for the NASDAQ, but the Q’s suffice.

I then bring up charts, (Stocks > Charts > Stock Charts).

I then click on the dropdown window in the right-hand side Controls panel titled List. I then select Big Three and hit Update.

I can then go through each one and see if I can recognize a support and resistance level being tested or that the stock or ETF is breaking out or down from.

I don’t stop there.

I then go to my list of SectorSPDR ETF’s. Yes, I have a list of the Sector SPDR ETF, which has all 11 ETF symbols in that list.

If I don’t want to spend time going through each chart myself and using my eye to ascertain a technical pattern setup I like, I can simply run any number of scans I choose.

I am a fan of Candlestick Charting, so I often start my analysis there.

I usually start with the Candlestick Stars batch of patterns.

Go Stocks > Stock Rankers > Candlestick Stars

On the page I see the Search Stocks part to the left and I click on the circle for Stock Lists and select a list I want.

I am going to use XLK for this article.

The Wizards to the right are the different scans (the term Wizard = Scan).

I chose the Two-Day Bullish Patterns for this article. And then I clicked Search.

A stock that appears on the search with a Bullish Kicker Pattern was Goldman Sachs (GS).

I can’t show you that image because by the time I got back to getting the image of the results list it had dropped off the list.

I will still show you all the chart to show you the Bullish Kicker Pattern on GS it found at the time of the scan I ran a bit ago.

The question that usually gets asked when something like this happens is if I no longer pay attention to the stock or ETF if it drops off the list.

The answer to that is Yes, if I haven’t already acted upon it with an option trade. If I had acted on it and it then drops off I continue to manage the trade to my initial trade plan when it appeared on the scan and I built an option trade.

Recap: Top-Down Approach

• Big thee indexes: Dow, NASDAQ and S&P 500
• Top ETF’s
• Stocks meeting technical patterns I like

Special Offer

Join Mastery On-Demand!

Have you ever wanted to join the Mastery Program but couldn’t make the live events? Well this year I wanted to change it up and offer you the ability to learn on your time with our brand new Mastery On-Demand offering.

Choose from a wealth of Mastery Programs including our System Mastery, Hedge Fund Mastery, and Trend Mastery — or choose to get access to all of them with the All Access pass.

Join Today!