Nice move on /NG this morning.
We hit our goal at $5.32 this morning – as we predicted in Wednesday's Live Trading Webinar (replay available here) giving us a $3,200 per contract profit in two days – congratulations to all who played along (we are done with this trade)! Our original set (this was a bonus round) was played on Tuesday, when I said:
So basically we want to lock in $1,000 – so that's the stop but over $5.10 and that becomes the stop but the retrace from $5 would be 0.02 and 0.04, which is where we'd end up stopping out. What do we expect? Well this had a very high potential for reward as we've slipped from $5.80 so it's an 0.80 drop (will consider below $5 while market was closed to be overshoot) so 0.16 bounces means $5.16 would be the weak bounce and the retrace from that would be 0.032 so $5.13 and $5.105 so, on the way up, we watch those carefully to see if they give us trouble. More bullish if they don't.
As I keep saying, the 5% Rule™ is not TA – it's just math. That's why, unlike TA, it actually works. It doesn't work on it's own, however, you have to have the Fundamentals backing you up but the combination of solid support and strong Fundamentals is a winning one. Oil (/CL) is back to $83.50 and the S&P (/ES) is back to 4,550 and both make nice shorts here. As I've mentioned before – we think the GDP Report next Thursday will be a disappointement.
Despite some rocky earnings reports, most notably from Intel (INTC), the market is in a bit of a relief rally as China's Evergrande suddenly made a bond payment (as if one payment fixes everything). Had they not made this particular $83.5M (out of over $300Bn in debt), they would have been in default, been audited and all their financial woes would have been exposed in short order – of course SOMEONE came up with that payment!
SNAP is also getting crushed and other social medias are getting dragged…
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