What an interesting week we just had. I think the Nasdaq breaking below its trading channel has to be top of the list in terms of events in the stock markets. Microsoft reported great numbers but didn't have anything incremental to stay even more excited about, so the stock sold off. Tesla reported a profit, but lost money on it's core car business, and more big earnings are set for this coming week! What fun!
In macro land, we've got even more China/USA trade tensions after the US forced China to shut its Houston office followed by China forcing the US to shut Chengdu. Good times.
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Market summary for last week:
U.S. Indices
Dow -0.8% to 26,470. S&P 500 -0.3% to 3,216. Nasdaq -1.3% to 10,363. Russell 2000 -0.3% to 1,468. CBOE Volatility Index +0.6% to 25.84.
S&P 500 Sectors
Consumer Staples +0.8%. Utilities +0.1%. Financials +1.3%. Telecom -1.1%. Healthcare -0.7%. Industrials -0.2%. Information Technology -1.5%. Materials +0.5%. Energy +2.1%. Consumer Discretionary +1.3%.
World Indices
London -2.7% to 6,124. France -2.2% to 4,956. Germany -0.6% to 12,838. Japan +0.2% to 22,752. China -0.5% to 3,197. Hong Kong -1.5% to 24,705. India +3.% to 38,129.
Commodities and Bonds
Crude Oil WTI +1.9% to $41.34/bbl. Gold +5.% to $1,900./oz. Natural Gas +4.5% to 1.796. Ten-Year Treasury Yield +0.1% to 139.55.
Forex and Cryptos
EUR/USD +2.%. USD/JPY -0.81%. GBP/USD +1.8%. Bitcoin +4.4%. Litecoin +9.5%. Ethereum +20.%. Ripple +3.7%.
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This week we get earnings from:
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I haven't included a charts section in a few weeks because I share so many charts during the week. Instead, I think it's better to talk about a topic in a bit of depth.
So I want to talk about how I approach day-trading.
I think there are 3 major inputs to my personal day-trading recipe.
1) Market direction.
2) Volatility.
3) "Feel".
1) Market Direction: You need to have a view on the direction of the market for that given day and whether that agrees or disagrees with your medium-term view on markets.
For example: I'm bearish on stocks. But there has been a long rally despite my view. So on down days, I really push my day-trade bets because I get a short-term and medium-term view that agrees. When there are up days in the near-term view and I'm bearish, I make smaller bets on day-trades as I don't want to get caught fighting the tape for the day.
2) Volatility: The higher the VIX, the quicker the trades. Since VIX fell this week, I traded less. It means it takes longer for a trade to make the same amount of money. And the recycling of capital can't happen as frequently. Pretty simple.
Higher VIX days are also when I tend to trade long and short. Basically, any short-term trade can work out profitably with high volatility and a small profit goal.
3) "Feel": Some days I just have a "feel" for how the market trades. It has tended to be on down days - where the Market Direction lines up in the short and medium-term view I hold. But Friday was a day where we rallied all day and my "feel" for the market was spot on. I traded long positions all day and did really well.
On days where my "feel" is there, I trade bigger and more often. Learning not to fight a day where my "feel" for the market isn't there is still a learning process. And a losing streak can get ugly if you try to fight through a cold streak. Believe me. I've done it.
FINALLY: The most important part of my day-trading is to keep and take notes. I've learned that I'm better in the mornings than in the afternoons...unless I had a morning loss - then trading all day is usually a good idea. If I start up for the day, I tend to get worse as the day goes on. I think it's because I become more focused after a losing start and less focused/more greedy after a good start. If I didn't keep notes about timing of trades and re-ready my diary for each day, I might not learn these things. I also know that my notes keep me honest. I could hide losses in my head or ignore losing streaks. But since it's written down, it can't be faked, fugded, or ignored. I share my results with my wife each day, so again - no hiding from a bad day.
So if you decide to start day-trading, start small. Keep great notes. And have some sort of process or system that works for you.
________________________________________________
Also, I've gotten back into running again. I ran maybe 40-60 miles per month from July to October of last year. Then 125 miles in November and maybe 90/month until the lockdowns started in March. Around that time in March, there was a day where I just couldn't run without losing my breath. It was very strange. I thought I was tired. So two days later, I tried to run again and had the same strange shortness of breath. When quarantine started, I just stopped running altogether.
Then in June, I began to run a bit again - maybe 10 miles a week. When July hit, I decided it was time to get back in shape. I've now run 20 of the last 21 days and have a 14 day streak of running at least 5K on any given day. That shortness of breath is gone, thankfully, and I'm starting to feel like I'm on the cusp of being in great shape again. I ran for an hour 2x per week over the winter and managed to get between 7-8 miles. I'm not quite that fast just yet, but can run for 90 minutes without stopping. So making great progress.
I fully embrace "Sunday Runday" and have gotten in 15K (9.3 miles) each of the last 2 Sundays.
Running after the market close each day helps me think about the day and refocus before spending time with my family. And it gives me something to obsess over on weekends rather than the stock market. I think it's healthy - mentally and physically.
How do you exercise?
__________________________
Cheers and good luck out there this week!
In macro land, we've got even more China/USA trade tensions after the US forced China to shut its Houston office followed by China forcing the US to shut Chengdu. Good times.
________________________________________
Market summary for last week:
U.S. Indices
Dow -0.8% to 26,470. S&P 500 -0.3% to 3,216. Nasdaq -1.3% to 10,363. Russell 2000 -0.3% to 1,468. CBOE Volatility Index +0.6% to 25.84.
S&P 500 Sectors
Consumer Staples +0.8%. Utilities +0.1%. Financials +1.3%. Telecom -1.1%. Healthcare -0.7%. Industrials -0.2%. Information Technology -1.5%. Materials +0.5%. Energy +2.1%. Consumer Discretionary +1.3%.
World Indices
London -2.7% to 6,124. France -2.2% to 4,956. Germany -0.6% to 12,838. Japan +0.2% to 22,752. China -0.5% to 3,197. Hong Kong -1.5% to 24,705. India +3.% to 38,129.
Commodities and Bonds
Crude Oil WTI +1.9% to $41.34/bbl. Gold +5.% to $1,900./oz. Natural Gas +4.5% to 1.796. Ten-Year Treasury Yield +0.1% to 139.55.
Forex and Cryptos
EUR/USD +2.%. USD/JPY -0.81%. GBP/USD +1.8%. Bitcoin +4.4%. Litecoin +9.5%. Ethereum +20.%. Ripple +3.7%.
___________________________________________________
This week we get earnings from:
___________________________________________________
I haven't included a charts section in a few weeks because I share so many charts during the week. Instead, I think it's better to talk about a topic in a bit of depth.
So I want to talk about how I approach day-trading.
I think there are 3 major inputs to my personal day-trading recipe.
1) Market direction.
2) Volatility.
3) "Feel".
1) Market Direction: You need to have a view on the direction of the market for that given day and whether that agrees or disagrees with your medium-term view on markets.
For example: I'm bearish on stocks. But there has been a long rally despite my view. So on down days, I really push my day-trade bets because I get a short-term and medium-term view that agrees. When there are up days in the near-term view and I'm bearish, I make smaller bets on day-trades as I don't want to get caught fighting the tape for the day.
2) Volatility: The higher the VIX, the quicker the trades. Since VIX fell this week, I traded less. It means it takes longer for a trade to make the same amount of money. And the recycling of capital can't happen as frequently. Pretty simple.
Higher VIX days are also when I tend to trade long and short. Basically, any short-term trade can work out profitably with high volatility and a small profit goal.
3) "Feel": Some days I just have a "feel" for how the market trades. It has tended to be on down days - where the Market Direction lines up in the short and medium-term view I hold. But Friday was a day where we rallied all day and my "feel" for the market was spot on. I traded long positions all day and did really well.
On days where my "feel" is there, I trade bigger and more often. Learning not to fight a day where my "feel" for the market isn't there is still a learning process. And a losing streak can get ugly if you try to fight through a cold streak. Believe me. I've done it.
FINALLY: The most important part of my day-trading is to keep and take notes. I've learned that I'm better in the mornings than in the afternoons...unless I had a morning loss - then trading all day is usually a good idea. If I start up for the day, I tend to get worse as the day goes on. I think it's because I become more focused after a losing start and less focused/more greedy after a good start. If I didn't keep notes about timing of trades and re-ready my diary for each day, I might not learn these things. I also know that my notes keep me honest. I could hide losses in my head or ignore losing streaks. But since it's written down, it can't be faked, fugded, or ignored. I share my results with my wife each day, so again - no hiding from a bad day.
So if you decide to start day-trading, start small. Keep great notes. And have some sort of process or system that works for you.
________________________________________________
Also, I've gotten back into running again. I ran maybe 40-60 miles per month from July to October of last year. Then 125 miles in November and maybe 90/month until the lockdowns started in March. Around that time in March, there was a day where I just couldn't run without losing my breath. It was very strange. I thought I was tired. So two days later, I tried to run again and had the same strange shortness of breath. When quarantine started, I just stopped running altogether.
Then in June, I began to run a bit again - maybe 10 miles a week. When July hit, I decided it was time to get back in shape. I've now run 20 of the last 21 days and have a 14 day streak of running at least 5K on any given day. That shortness of breath is gone, thankfully, and I'm starting to feel like I'm on the cusp of being in great shape again. I ran for an hour 2x per week over the winter and managed to get between 7-8 miles. I'm not quite that fast just yet, but can run for 90 minutes without stopping. So making great progress.
I fully embrace "Sunday Runday" and have gotten in 15K (9.3 miles) each of the last 2 Sundays.
Running after the market close each day helps me think about the day and refocus before spending time with my family. And it gives me something to obsess over on weekends rather than the stock market. I think it's healthy - mentally and physically.
How do you exercise?
__________________________
Cheers and good luck out there this week!
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