The market seems to be shaking off all bad news for now and I therefore like the technical action in the last two trading sessions. Obviously the market can flush just as quick and go test the lows. That’s why we always use stops – hard and or mental. Because everyone’s risk tolerance is different – please view the trades below for educational purposes only and not trading advice.
The M48 model purchased the SSO and some AAPL today. I wish I could show you a video (coming in Jan.) on these trades because it would allow you to see what I see w/ more clarity. If the market trends higher I will add by using a combination of the SPY and SSO as mentioned in my previous post. I would like to see a move through 90 on the SPY soon to increase the probabilities of a Christmas rally.
Long AAPL at 94.81 w/ my stop at 88.16 which is very near term support and 7% back from our entry. Close today was 95.90. I thought it was important for it to close above 95. I was following it on a 1 minute chart and based on probabilities felt it would close above 95 -which it did. If it goes, our next resistance is at 100 and then 110 roughly. I prefer more volume. At this time this APPLE trade is a small percentage of the M48. I will add w/ increased price and volume. If we get stopped out – that’s ok too. I told the Pro Investor Show listeners to be out of AAPL at 162 when the price was 170. Now they get to buy it back at a nice discount knowing that if it doesn’t work we will exit again.
Long SS0 (ultra S&P ETF) at average fill of 24.54. I would like to see it get through 26.63 before I add. If we break 21.87 – based on probabilities I think we go lower. I do see a gap that could get filled for a quick pop to the upside.
So what does all this mean? The M48 is slowly buying into various positions and will add with increased volume and price. If we are wrong we will exit w/ a small loss to preserve capital inside the M48. The trend is your friend – and so are my clients.