Using Heikin Ashi candles to decide if SPY may rally
Unless something changes in the final 1.5 hrs today, every day since Monday has seen a higher low. Price has been bouncing around sideways and today is thus far an inside candle. On daily, price has not even retested the 10sma yet.
*** I bought 4Feb 440 calls - there has been over 10k volume at this strike today.
Stochastic and Directional volume indicators incline me towards swing call trades, so I switched to Heikin Ashi candles to get a different look. What I see are two indecisive candles. One is common between turns (look at the chart history) but here we have two - talk about an epic price battle!
Now looking at the 30m chart, I see an interesting clue. The three pink arrows show lower highs, and yet the most recent one saw a higher stochastic %K spike. This indicates there was some strength to that move up. It is common for another on-trend move before a real turn begins.
If I am wrong then this sideways range breaks down even further. So to prepare for that I will use less capital and be ready to exit with a loss.
*** I bought 4Feb 440 calls - there has been over 10k volume at this strike today.
Stochastic and Directional volume indicators incline me towards swing call trades, so I switched to Heikin Ashi candles to get a different look. What I see are two indecisive candles. One is common between turns (look at the chart history) but here we have two - talk about an epic price battle!
Now looking at the 30m chart, I see an interesting clue. The three pink arrows show lower highs, and yet the most recent one saw a higher stochastic %K spike. This indicates there was some strength to that move up. It is common for another on-trend move before a real turn begins.
If I am wrong then this sideways range breaks down even further. So to prepare for that I will use less capital and be ready to exit with a loss.
Trade active:
My exit is SPY below 429.
And for reference, I just noted the 430 put volume, same expiry, was over 36k!!!
And for reference, I just noted the 430 put volume, same expiry, was over 36k!!!
Trade active:
Looks like that put volume was to be heeded. Since SPY stayed over 429 yesterday, my calls will be red today. This is the beauty of a small position and capital management. I have no stress about my trade and still believe a good rally is coming so I will hold my calls into Monday. Yesterday afternoon I was unsure if the lows would be retested - though I usually expect it to happen - so I was early in buying calls. ES futures are close to retesting lows and should move up thereafter.
For reference, on 27 Jan I bought 4 x 4Feb 440 calls @ $4.20. I will not add to my position.
For reference, on 27 Jan I bought 4 x 4Feb 440 calls @ $4.20. I will not add to my position.
Trade closed manually:
Sold calls for 4.60. Wanted to take some risk off since NFLX calls are a dud and I have more time on my NVDA and IWM calls.
