Premium subscribers: Owing to the general market weakness, there will not be a Sunday evening video. The next video will take place Monday, as scheduled.
A market that had given the U.S.-China trade talks the benefit of the doubt suddenly had a change of heart late last week. The selling began Wednesday just after President Trump announced another round of tariffs on Chinese goods.
The selling has taken the form of a risk-off stance that had not been seen since the May 10.8% correction in the Nasdaq. As such, more-speculative segments like growth and technology underperformed while defensive sectors like utilities, consumer staples, communications, and REITs showed relative strength.
A positive is that the weakness seen last week is not widespread. To wit, there are 25 or 30 names on the Watch List, or about half, that hold up well. Unfortunately, none offer the type of pattern setup that leads to an actionable idea for the breakout trader. In other words, most of the speculative growth-stock leadership is extended above recent support areas. As has been discussed, this has been the case for some weeks and has resulted in relatively few breakout setups.
In sum, for the time being, this is not a risk-on market. This should not be a surprise given the muted volume of the June-July rally, the slim menu of pattern setups for the past several weeks, and the tendency for some breakouts to be sold before meaningful follow-through.
Risk should be reduced by abstaining from fresh-money breakout buys. Those holding open positions should manage each on a case-by-case basis. It is not necessary to adopt an all-cash position if some positions act well and have yet to break down.
Subscriber: In July I had 3 losses out of 14 trades. -0.93R, -0.25R, and -0.05R. My best gain was 7.62R. Thank you, Kevin, for the service!
KM: You are welcome. Thank you for sharing this with me. I applaud your usage of the R concept and like how you minimized losses to < 1R per losing trade. I am pleased you are finding the service to be a good fit with your needs.
Q: Hi Kevin, any recommendations on Swing Trading? Your previous Van Tharp recommendation was excellent – I've read it a couple times, and studied sections. Swing Trading is totally new to me, so I am hoping to learn more.
A: Thank you for your question. Believe it or not, I did not read any books during my research project into short-term trading. I wanted to cut right to the chase, so I obtained 100+ trading systems/strategies over a several-year period. These cost anywhere from $79 to above $5k. Some were free. I tested them, usually three or four at a time. Most were not helpful. They appeared to be offered by people who were not traders, but trying to make a buck off selling systems. Of course, you don’t know that going in. Others were profitable, but either the strategies did not resonate with me or they did not provide enough trades per day/week/month.
In my humble opinion, by studying the swing/pullback setups in the videos, you will likely learn a great deal about how it's done. Some subscribers have confirmed this.
For intraday ideas and analysis: https://twitter.com/mardermarket
Unless otherwise noted, charts created using TradeStation. ©TradeStation Technologies, 2001-2019. All rights reserved.
The views contained herein represent those of Marder Investment Advisors Corp. At the time of this writing, of the stocks mentioned in this report, Marder Investment Advisors Corp., Kevin Marder, or an affiliate thereof held no positions, though positions are subject to change at any time and without notice. Estimate data provided by Thomson Reuters. Expected earnings release dates provided by EarningsWhispers.