Welcome to the market recap for Wednesday March 13, 2024. The plan for members is below in the paid section so let’s get started.
Not really too much to report today from that CPI print other than it was a great trap to then get long on some intraday momentum names like MSFT 0.00%↑ META 0.00%↑ and QQQ 0.00%↑ call flow. With no major data tomorrow aside from Crude EIA report most of this should check back slightly if not push higher just a bit into the Thursday data.
S&P - $5220-$5226 is a key spot to hold. If for any reason you lose that it’s light selling to prior low of day. So if we checkback at all on that tomorrow you want to see buyers step in. Overall, the “big” move comes Thursday with that PPI data so not expecting a hyper volatile day tomorrow. That should matter (reading the type of day it could be) to you if you are intraday momentum trader but it should really matter if you trade futures. Without reading the type of day it’s hard to see scenarios play out and doing that alone can save you from headaches. $5280-$5290 are targets on Thursday but above that it’s hard to see much more.
ABNB - This stock has been strong. It’s been in the TLV Report in Swing Monitor for a month now and I added into that long today expecting more on the second and third soft-targets discussed. With trades like this (lower beta) I use the equity and DITM calls with duration. That is explained here.
That’s it for today. Tonight in the Premium Post I am going to discuss some trading psychology because there was a discussion one of the DeltaOne traders brought up today on expecting to win on every idea. Normally, I don’t really comment to much on this topic because it’s not (really) something that affects me much anymore being in this business for so long but I realize many of you might be newer and/or like this topic. To share a few things here with you before the premium post there are things I believe that cause issues with most people that attempt this business and the first one simply comes down to this:
Most of you see this as day-trading. You buy it or sell it and it has to work now and if it doesn’t you get pissed. Worse, you go and backtest “trade setups” (15 min opening candle too) and think just because it’s back-tested that this equates to you being successful. That thought process has never once even crossed my mind in my career until I met many that were retail traders. So, when I say it’s hard for me to relate to that it is but I’ve met so many retail traders that typically the mindset and struggles I understand and most of them, in my view, are self-inflicted and easily cured.
The approach and framework I always used came from money management where you build a long/short portfolio and you allocate that capital based on worthiness of the ideas.
You take (for example) $2 million and spread it out with long/short ideas - some short-term 10 day ideas some 6-9 month ideas, some equity, some spreads/strips, some DITM some LEAPS - the point is. You are managing the portfolio, not managing it trade by trade and I think (REALLY) if more of you that struggle with this idea looked at risk from portfolio risk v. individual trade risk that you would have less issues.
There is never one single trade that SHOULD EVER destroy a portfolio or month and if there is you are still acting from a point of unconscious incompetence. (Not let me be clear on this, this is not futures trading applicable - YOU DO NOT MANAGE A PORTFOLIO OF FUTURES YOU TRADE IT - do not conflate this advice with futures - NOT THE SAME!!)
But then again, when you only are introduced to the markets from one perspective (what most of you see from these YouTubers) then that’s all you know and like I said, my belief that most things are self-inflicted because there has never been a thought process for trading ever explored outside of ‘day trading momentum’ - clearly, that causes issues!
I am not poking fun at it but rather trying to explain that each trade you take should have different goals and if you haven’t even had this thought process then you really should assess what it is you’re doing before you lose too much money.
In The Premium Video Tonight:
S&P/Nasdaq/Crude Plan
Tesla / Google - Technical Trades & Levels Explained
Breaking down how to think about risk on the portfolio (not a trade)
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