Post Holiday Rest

The last two weeks have been rough and I haven't made enough time for trading, blogging or anything. The market's been closed since Thursday night, which has given me the time to step back, reset, and sprint again. Let's get started.

Above we have the end of day performance from the 11 sectors observed on Thursday. Looking at all the sectors and the volume multiplier, it is evident that the trading was a bit above the average trading volume for the majority of them, except for XLI and XLRE.

After running my model (Multi-Sector Predictive Liquidity Model)– which needs a lot of enhancements, but can still yield a solid prediction – we end up with the following prospects:

Now, while I don't expect all the sectors on the left chart to be green, I do expect the first three XLP, XLF, and more importantly XLY to perform greatly tomorrow. We can revisit the performance tomorrow based on the prediction above. However, for my own trading purposes (assuming I take a trade tomorrow), I will be focusing on XLY sector, below is my reason why:

While we could argue that XLY is headed down a falling wedge, we see that it is heading to a new high, and based on previous charting I've performed, the wedges break at around 60-75%. By that logic, I'd expect XLY to break past $119 by July 7th. Now, as always, as much as I love ETFs, I must drill deeper into it and select an asset from the sector above.

As shown above, I've picked TSLA as my next trade tomorrow. Now I will say, I don't enjoy it all the time as TSLA is a little too volatile for my taste, but maybe I see it that way because I didn't know what I was looking at all those times. I can see TSLA breaking $420 by end of day tomorrow. Based on my previous analysis, if I were to enter a $420 call for TSLA expiring on July 8-10, then I'd hold overnight based on the charting above. I saw this when looking at JPM in the past.

It does get a little harder to hold myself when you see the calls loud and clear. It's hard being patient, but I will hold at the very least, the first 20 mins to decide if the entry is there or not. I am very confident on this approach, and I do believe the drought is finally over.

I'm excited for tomorrow and also for further enhancements on my model. Let's see what tomorrow holds for us!