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Al_Gorithm
Posted : Thursday, August 10, 2017 1:21:06 PM

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This setup was born on the back of a coffee-stained Starbucks napkin this morning, so all the usual disclaimers apply. :) 

Here's Abbot Laboratories. The Weekly chart on the left shows a nice uptrend in June, followed by consolidation in the first half of July. The quarterly, semi-annual, and yearly EMAs are all moving up. You don't really need the histograms if you're eyeballing but I use them for scanning. (Those are 13,26 and 26,52 PPOs ... the actual PPO lines plotted as histograms; they're not PPO Histograms).

Given 20/20 hindsight, once the Daily chart squeezed TTM style, it would have been nice to buy a Weekly Vertical Call Spread, maybe two weeks out to give the squeeze time to play out. I'm not a home run hitter so I generally prefer spreads to single options. Higher commissions, but lower cost, lower breakeven, and time decay is generally neutralized.

Then it's off to the golf course. LOL.

Once the squeeze is off, it's time to exit when the spread reaches max profit, or if you like swinging for the fences, maybe hold on for price to reach 3 ATRs. 

If only it was this easy. <sigh>

Once the caffeine wears off I'll no doubt find the flaw in my plan. In the meantime, we'll be hitting the ol' spacebar looking for more of these. :)

Al_Gorithm
Posted : Thursday, August 10, 2017 2:16:29 PM

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Agilent back in March/April. 

Easy peasy :) ...

Al_Gorithm
Posted : Thursday, August 10, 2017 2:24:52 PM

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April/May AAPL. At this rate, you'll be a millionaire before you even get to the B's. 

LOL!!

Al_Gorithm
Posted : Thursday, August 10, 2017 2:35:44 PM

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ADI, Dec/Jan. Like Uncle Trumpy says, "you'll be tired of winning!" LOL.

Al_Gorithm
Posted : Thursday, August 10, 2017 2:53:14 PM

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ADP, Dec/Jan. Buzzkill, LOL. 

Still 4 out of 5 ain't bad. And a spread would've lessened the damage. A well placed stop would've been even better, but that's another story. :)

Al_Gorithm
Posted : Thursday, August 10, 2017 2:57:41 PM

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AET. Current chart. It's down the last few days, but it squeezed last week, and came within spitting distance of 3 ATRs on Aug 3rd before falling. I coulda should woulda exited on the 3rd, or sooner if my spread hit max profit.

I'm calling it 5 out of 6. LOL.

Al_Gorithm
Posted : Thursday, August 10, 2017 3:17:30 PM

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AFL, Aflac. Jun/Jul...

  • All three EMAs movin' on up on the Weekly.
  • Squeezed on the Daily chart, then hit 3 ATRs.

Ka Ching!

Only thing about this one is that it remained in a daliy squeeze for about 15 bars, longest so far. May have to look at cost/benefits of Monthly versus Weekly Options. We'll see. There's always more than one way to skin a duck...

Still, 6 out of 7. Aflac!!  LOL.

Al_Gorithm
Posted : Thursday, August 10, 2017 3:21:13 PM

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AIG, Dec/Jan. Weekly EMAs rising, daily squeezing ... then it sh*t the bed. 

Oh well, even the Cubs can't win 'em all. I can live with 6 out of 8.

Al_Gorithm
Posted : Thursday, August 10, 2017 3:42:00 PM

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ALB, ALGN, ALK, the list goes on and we're still in the A's ... wish TC2000 had backtesting so I could get a reality check. Guess it's forward testing paper trading, but that takes time, and I want to be a millionaire now!  LOL.

In the meantime, I'll have to settle for another Starbucks coffee and start looking for some examples of falling stocks.

 

Al_Gorithm
Posted : Thursday, August 10, 2017 3:45:58 PM

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ALL, March/April.

Good example of a "head fake" squeeze breakout - it broke down first for a few bars before turning back up and piercing the 3 ATR channel ... another reason I prefer a spread to a single option ... less chance of getting shaken out of a winning trade.

Still looking for shorting examples.

Al_Gorithm
Posted : Thursday, August 10, 2017 3:48:02 PM

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AMAT, March/April. 3 weekly EMAs rising, daily squeezing, hits 3 ATRs, yada, yada, yada. :)

Al_Gorithm
Posted : Thursday, August 10, 2017 3:52:41 PM

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ATVI, March/April. <yawn>

Al_Gorithm
Posted : Thursday, August 10, 2017 3:57:43 PM

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AVY, double-header: April & June.

Love when those EMAs are so nice and firm ... you could bounce a quarter off that. ;)

Al_Gorithm
Posted : Thursday, August 10, 2017 4:01:13 PM

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BA triple-header, January, April, July.

Bouncy, bouncy ... easy peasy lemon squeezy.

Al_Gorithm
Posted : Thursday, August 10, 2017 4:05:43 PM

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Okay, time to put down the coffee and create a scan. The ol' spacebar ain't finding me any decent falling stocks ... gee, wonder why? Market at/near all-time highs.

LOL.

Al_Gorithm
Posted : Thursday, August 10, 2017 4:07:05 PM

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Ooooo, I forgot about Slide Show mode ... coffee refill!

Al_Gorithm
Posted : Thursday, August 10, 2017 4:15:25 PM

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Macy's (M) sh*t the bed three times this year. Two were bordeline and I doubt I would've taken the trade but the April downtrend, squeeze, and drop was textbook ... all EMAs falling, well defined squeeze, and price waved at the 3 ATR channel as it blew by on the way down.

Wow, Macy's hasn't been this low since 2011 ... guess Amazon really is eating a lot of the retailer's lunch. Macy's, how low can you go? LOL.

Al_Gorithm
Posted : Thursday, August 10, 2017 4:26:46 PM

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COTY, March, EMAs all pointing south, squeeze, and sh*t the bed, 3 ATRs.

Lovin' slideshow. :)

Al_Gorithm
Posted : Thursday, August 10, 2017 4:34:37 PM

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Maybe I'll call this the "Slope, Squeeze, Spread, and Pop" strategy!

Okay, the barista is looking at me funny. I've had waaay too much caffeine today. Good for Starbuck's business, though. Hey, lets look at SBUX...

Would you look at that. In May, it's up, sideways, squeeze, pop 3 ATRs ... even SBUX lets you make money to pay for all those Frappuccinos! LOL.

Al_Gorithm
Posted : Thursday, August 10, 2017 4:37:47 PM

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FLR, July. Slope down, squeeze, dump 3 more ATRs. Lather, rinse, repeat!

LOL! More coffeeeeeee!!!

Al_Gorithm
Posted : Friday, August 11, 2017 1:52:10 PM

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AABA triple play :)

April, June, July.
Weekly up, Daily squeeze, Pop 3 ATRs.

Barista, another round of coffee please! LOL.

Al_Gorithm
Posted : Friday, August 11, 2017 2:04:01 PM

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RACE Ferrari. One, two, three, four ... almost like an ATM machine.

Not sure I'd buy a Ferrari, though - don't tell anybody but I never learned to drive a stick. LOL.

Al_Gorithm
Posted : Friday, August 11, 2017 2:09:47 PM

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PYPL, PayPal pays off ... very punny!

April/May squeeze took awhile but patience was rewarded with a 10% pop.
July's squeeze "only" brought a 5% pop, about 3 ATRs ... sound familiar?

Wow, that last coffee sure didn't last long ... I'll have another please!

Al_Gorithm
Posted : Friday, August 11, 2017 2:19:28 PM

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YY, classic first pullback after a trend change, at least 15% pop.
YUM, almost 6%.
XOP, over 5% dump after a sqeeze on the way down.
XLY, only 2.5%, LOL.

Wait, those muffins smell soooooo good. Barista!

Al_Gorithm
Posted : Friday, August 11, 2017 2:22:10 PM

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Personally not a fan of ETFs, but XLU popped over 3% May into June. I'll take it. :)

Al_Gorithm
Posted : Friday, August 11, 2017 2:25:36 PM

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Another ETF ... XLK, around 6% though that one red candle in the middle would've shaken me out, settling for around 3%.

Al_Gorithm
Posted : Friday, August 11, 2017 2:27:00 PM

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XHB. Maybe I should start looking at ETFs again. LOL.

Al_Gorithm
Posted : Friday, August 11, 2017 2:37:53 PM

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Weight Watchers (WTW) around 14% in 5 trading days. Lose weight, make money - good deal.

No, Oprah! Put it down, that's MY muffin!!

Al_Gorithm
Posted : Friday, August 11, 2017 3:30:38 PM

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VRTX, Vertex Pharmaceuticals - May and July squeezes could've paid for all your prescriptions. LOL.

Al_Gorithm
Posted : Friday, August 11, 2017 3:33:22 PM

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V, Visa - April and July squeezes could've paid all your credit card bills. ROFL.

Al_Gorithm
Posted : Friday, August 11, 2017 3:36:36 PM

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USB, January - bit of a head fake down, but a spread would've kept me in it for around 6% to the upside. 

Al_Gorithm
Posted : Friday, August 11, 2017 3:47:49 PM

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URI, United Rentals, January, 12% pop. Like finding free money lying on the sidewalk.

Al_Gorithm
Posted : Friday, August 11, 2017 4:48:02 PM

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URBN, Urban Outfitters sh*t the bed around 15% after squeezing on its way down. Another retailer with a lousy looking 52 week chart.

 

Al_Gorithm
Posted : Friday, August 11, 2017 4:50:34 PM

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UNP, Union Pacific - only 3%-4% in January. Tip money. LOL.

Al_Gorithm
Posted : Friday, August 11, 2017 4:52:46 PM

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UNH, UnitedHealth - February, April, May ... stop me if you've heard this one before. :)

Al_Gorithm
Posted : Friday, August 11, 2017 5:32:50 PM

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As a current example the QQQ's just entered a daily squeeze three days ago. The 13-week EMA is kinda flattening out though due to the recent pullback.

If you're an Elder Impulse "system" fan, QQQ is Blue on the Weekly but flashing Red on the Daily. My gut tells me to wait to enter a long call spread until after Elder's Daily flips from Red to Blue. Or not, LOL.

Time will tell. 

Happy Friday!

Al_Gorithm
Posted : Saturday, August 12, 2017 12:54:03 PM

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JCP, J.C. Penney, another pathetic looking retail stock. 

One company's misery is another trader's gain. LOL!

February, April, May, June - FOUR opportunities to take advantage of JCP's slide. 

There was an even bigger drop this month, but technically I wouldn't have taken the trade because the 13-week EMA turned up recently and was no longer agreeing with the falling 26 and 52 weekly EMAs. Hindisght is 20/20 but you've already had 4 chances to cash in. Move along, nothing to see here - lots of fish in the barrel.

Bulls make money, bears make money, pigs get slaughtered. I just made that up. ROFL.

If you own JCP stock, sorry ... but why? 

 

Al_Gorithm
Posted : Saturday, August 12, 2017 1:13:01 PM

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Of course, you can't win them all.

MOO, Market Vectors Agribusiness ETF ... frakkin' cows. LOL.

Would've taken a hit on the February trade, but good trader bees know how to manage their positions to cut losses. :)

MOO also dropped a cow pie in June, though it never quite technically squeezed on the daily chart, so if you followed your trade plan like the good trader bee you are you would've avoided stepping in that steaming pile.

 

Al_Gorithm
Posted : Saturday, August 12, 2017 1:32:46 PM

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PPP, Primero Mining. How low can you go?

January head fake but proper trade manangement led to a nice gain on PPP's pain.

April, same deal but head fakes don't shake you out of the trade. Time to rhyme. LOL.

Even bigger drop recently if you're into tickers trading at $0.19. Wow.

Al_Gorithm
Posted : Saturday, August 12, 2017 1:37:38 PM

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GEN, Genesis Healthcare. Nice example of shorting the first little "rally" after starting a downtrend.

If you missed it you got another chance to cash in during June.

Oh yeah, did I mention August? There's a current trade still losing (for GEN) - winning for YOU.

Trend, squeeze, spread, pop, profit.

Lather, rinse, repeat.

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