2019-10-04 - Trading Plan

The goal of this trading plan is to have a more formal plan going into trading on 10/4/2019:

Market Summary: Market got whipsawed today first with knockdown on a weak ISM non-manufacturing data but then rallied on Trump trade talk rhetoric.

Main Trading Strategy: trade around positions with a core position long in small cap oil&gas names and shorting either ETFs, bonds, and selective shorting of individual equities. Ideally equal weight short and long with the idea of profiting on oil&gas eventually significantly outperforming the market.

Negatives (personal): Trading stepped away from computer with trades on watching the market get knocked down to take a phone call. Stated I would make it brief and I didn't have much time but that didn't happen resulting in missing the whipsaw and some winning trades turned to losing as a result. What upsets is me is I went into the call telling myself only a few minutes. Truth be told, while I expected a market bump I didn't expect the correction to take place so soon. Maybe 11am, 1pm etc. This is reminder that I can't take phone calls during trading hours unless I commit to what I say, like a 2 minute call or less. It is not professional. Trading requires 100% focus. Never regained my composure on this day because this was a stupid mistake. 4/5 stupid mistakes end up being costly. 1/5 stupid mistakes end up being profitable IME.


Oil - we jumped out of the descending triangle on the daily (Saudi strike, bullish) and swung all the way to the other side now however we haven't jumped out of the the large triangle dating back further to 2015. We could touch the bottom of that large triangle down to the 48 level or so which might be a spot to go long while still in this secular bull market. Watching USO someone in the 9.60-9.80 range.

Yesterday's (today's) Trades
- SLV (scalped) (win)
- SPY short (losing)
- TQQQ short (losing)
- FTSI (continue to trim) with attempted pair allocation in to SPNV. Need to determine what size position FTSI will equate to SPNV. Goal here is to profit as the spread between the two closes.

Daily Predictions

Job number is positive - market rips higher

  1. Look to short at gap fill into disappoint China meeting, look to trim FTSI

- Job number is weak - market rips lower

  1. Look to possible add shorts. If market gets really decimated than look to flip long and head into next week on possible bounce. Unsure about what I want to do with FTSI.

Daily Watching

SPY and QQQ are close to throwing buy signals.

- SLV - looking like it is hitting resistance with bearish matching high pattern. It is a sell below 16.39 in which case we might be looking for SLV to retest the 200 day. We have much much farther to go with this trade.

- HYG - tested the the 200 DMA and bounce, we may go higher and would be a good short

- SPNV - this isn't as attractive as previous sub .26c buy the stock still has room to go higher. Although I do not believe the company will actually buy back stock, after researching the company it is an interesting company with a well diversified portfolio of oil services, both domestic and international, fracking, off-shore etc. While I don't like the fact that management let this get delisted I also wonder if the the broker commission reduction next week will cause some of these stocks to suffer from manipulation as the market maker has now lost an edge.

- AAPL - Looking for short spot. Stock was dangerously close to rocketing higher
- HAS - Looking for short spot. Stock was a stay long and about to invalidate that.
- SBUX - Looking for short spot

- HCR - Outlook reduced by S&P 500 ratings. This is a sell. No reason to buy other than a super super sharp dip like maybe a bounce of a dollar to 1.20 but probably not. Consider maybe even buying puts.

- SLCA, SND, CVIA - short if anything.

Longer Term Discussion

The discussion longer term is where are we in the course of the secular bull market? Looking back at some charts tonight (10/4/2019) I can't help but wonder if this is 2007 where the market double-peaked just like it has recently. However the wave of selling didn't start for nearly a year later. Back in June (2019) I highlighted a piece about that the fact that about 50% of execs were predicting a recession by the middle of next year and that would line up with the timeline about right now. I do think things will unravel sooner this time if they do.

Interesting to note is that gold peaked in early 2008 as rates started to come down but eventually gold too would fall. Looking back at 2008 it doesn't even look like gold has even run in compariosn