SPY - Retest of the $300 Highs Coming September to October

Prior trade alert history on our SPY & TQQQ calls found here


UPDATED - September 9, 2019

BotTrigger Trade Alerts (3): $SPY $TQQQ $NVDA : $SPY sold our October $280 / $300 call spread @ $15.45 for a 54% gain from our $10 entry.

$NVDA adjusted limit order & have been filled: sold remainder of our position on the September $170 / $180 @ $6.90. & our $TQQQ calls we currently have a limit order to sell that position @ $17 but may adjust that anywhere from $16.75 to $16.50 in order to get filled before the end of today's close.

UPDATED - September 5, 2019

BotTrigger Market Update: $SPY, $QQQ, $XLF, & $DIA all have now broken out above their consolidation zones from August.

Although the chart in view is of the SPY on the hourly time frame, let's acknowledge that on the monthly chart August was a deep red bar and now so far September is starting out as a bullish engulfing bar. What's more, here on this hourly chart we can see that we have the makings of a giant "Island Bottom Reversal" where price has gapped up and departed an entire month of consolidation. We have also now broken out above the largest "volume @ price" area (see largest horizontal volume bar on right scale of chart). Now until decisive all time new high, no sharp pullback allowed otherwise there would would likely be 50% chances of lower high or slightly higher high trend reversal. Right now the setup is certainly more bullish & in favor that we are very likely gearing up for a new leg higher. Why? RSI on the daily chart is breaking out from a rising wedge of higher highs & higher lows, along with this price action. We're also seeing this move across multiple indices indicating broad market communication. Fool me once, shame on you, fool me twice, shame on me. Well we're seeing this bullish move confirmed by QQQ, DIA, XLF across the board. Unlikely this is a fake out or bear trap. Either way, I don't expect it to be a seamless ascent so we will be taking the opportunity to reduce longs as we push higher. Then reposition upon the NEXT RELATIVE PULLBACK.

UPDATED - September 3, 2019

BotTrigger Market Update: $SPY today is a technically driven gap-down to fill the open gap that was created by last weeks gap-up.

Gap-ups/downs can be occur on light volume & since this ...jut remember whenever we get a gap-up or gap-down that the market will test the veracity of the move to ensure that a sufficient market of buyers & sellers were/are truly in agreement on the move. This entire pattern is still net bullish and today's push lower is largely to fill the gap that was created from last week. Now b/c both the upper & lower blue lines (see chart) have been tested many times, it's unlikely they'll hold another retest...eventually those lines get taken out. Now bulls have been getting closer & revisited the upper blue line therefore should have better chances than bears. It's like, say, a basketball game: now bulls have the ball and are attacking. The question is, will they be able to score? I don't know but the side who has the ball at least has better chances than the other side who has no ball, right? The benefit of the doubt continues to go to the buyers/bulls of this market. Anyway, even if indeed bulls can score, I see the break above the upper blue line as the opportunity to "reduce" our long positions as we head into the last quarter of the year. Hedge Funds & Institutions etc who are just getting back from vacation will be putting cash to work to generate alpha into the years end but will also be very defensive with regards to printing positive P&Ls on their investor reports. We want to front run that as much as possible once we get a retest of the highs.

UPDATED - August 29, 2019

BotTrigger Market Update: $SPY the measured move target (yellow highlight) was exceeded which means the up momentum still is quite strong so likely more up ahead.

If bulls can touch the upper blue line then a breakout would be very likely. What's more, price action is now cutting through that largest horizontal volume bar as you can see here on the right scale of this chart showing the "volume @ price" indicator. Again, the largest of those bars is where you can identify the most heavily transacted area where shares between buyers & sellers were transacted. We still need to see price close above this area. So it's not enough just to see price get above it briefly...that's positive but we ultimately want to see price close above this. This resistance area is $292-$293. What tends to happen once price has proven it can take out the sellers above this area where the largest horizontal bar is, and if the view above shows very small horizontal bars...that is where the vacuum occurs where we see price get pulled into the slope (call it a vortex or passing the apex & reaching the tipping point or top of a water park slide) & now travel in the direction of the path of least resistance. Once above this bar it's simply easier for price to travel in that direction in regards to supply & demand dynamics. Doesn't mean it will...just means it's easier and we tend to see that play out more often than not. HOWEVER, today's giant gap up has given the bears a "sell the bounce" coupon to likely fill that gap somewhere along the way. For now, momentum is strong & watching closely.

UPDATED - August 28, 2019

BotTrigger Market Update: The $SPY has been cultivating a symmetrical triangle that as of now has a net bullish bias as illustrated here on this 60min time frame.

Price has thus far made higher lows within this pattern while it's now retesting yesterday's high of $289.95. The measured move breakout target off the lows has a target of $291.75. More importantly however is we want to see price eclipse this horizontal volume bar on the right scale of the chart: this horizontal volume bar represents the most heavily transacted area for all of August (even when I backup the data to mid April it still shows that this $292 area is the most heavily transacted area. So this is a key area I want to see price chomp through. If we can get a closing day above this area then that will setup the next opportunity which is to fill this naked gap area around $295. That will most assuredly give setup the energy it needs to retest the markets all time highs. However, and now this is only a near-term diagnostic: if we see weakness or strong reversals occur upon that retest of the $292 area, then we will be initiating a short position via SPY puts as a NEAR TERM market hedge. We're not buying those here however. It's contingent on how this pattern gets resolved which I'm watching very closely. In a dedicated blog post I will be posting the modeled short position that we're considering along with our target entry & exit. Again, we are still in a bull market on the primary term time frame. The weekly direction is the current; the daily direction is the tide; and the 60 min direction is the wave.

August 15, 2019

BotTrigger Trade Alert: $SPY bought the October 18, 2019 $280 / $300 vertical call spread @ $10.00. MAX GAIN is $20 for a 100% gain so long as SPY is @ or greater than $300 upon expiration.

Expiration being 64 days away from today, this is very similar to the July spread that we purchased back on May 10. Notice how the headline focus is now talking about policy stimulus being suggested & there is now this new theme how Powell will likely be taking a "whatever it takes" approach. Although we may still get a deeper low here on this near term trend, we're already getting bullish divergence on RSI values on the hourly chart, which suggests a stronger rebound is coming. We're also sitting right at the 200 day "exponential" moving average as it is; & the smoother 200 day MA is about 5 points below (blue line). That 200 day MA will very much function as psychological support. If we can get lower on the SPY anywhere from $280 to $275 than we intend on adding to this position.

Some of the greatest pearls shared by Jesse Livermore:

“Money is made by sitting, not trading.”

“The desire for constant action irrespective of underlying conditions is responsible for many losses in Wall Street even among the professionals, who feel that they must take home some money everyday, as though they were working for regular wages.”

“Buy right, sit tight.”

“Nobody can catch all the fluctuations.”

“There is a time for all things, but I didn’t know it. And that is precisely what beats so many men in Wall Street who are very far from being in the main sucker class. There is the plain fool, who does the wrong thing at all times everywhere, but there is the Wall Street fool, who thinks he must trade all the time. Not many can always have adequate reasons for buying and selling stocks daily – or sufficient knowledge to make his play an intelligent play.”

“It takes time to make money.”

“Don’t give me timing, give me time.”