- Market Overview: S&P 500
- Main Video: High Potential Stocks – 1h 01min
- Conclusion
- Watch List
- New Members: Where To Start & Key Topics
- FAQ Section
1. Market Overview: S&P 500
Click on S&P 500 daily chart to enlarge:
The positions I owned going into this week did not meet my expectations. That, along with stops and other ways to manage risk made me sell most of my positions during the week. On Friday I ended up selling out of the last remaining stocks. Even the strongest stocks had to go. I am now back in cash and the last ones I sold are the ones I will focus on most. DOCU, AMBA and KEYS look like they will be the first ones I buy back into.
For now though I will most likely remain on the sidelines for a few days. As outlined in this week’s video I see a market gearing up for a ‘last shake-out’ before we move higher. The MA 100 could act both as a price magnet and also provide strong support.
These shake-outs can be very treacherous. If such a scenario unfolds, stocks can quickly move down 5-10%. Some might even move down 10-20%.
Being in cash makes sure I do not get trapped in that one stock that corrects more than I would have expected. Shakeouts are also very risky because you never know if a stock actually bounces back after getting hit.
Going back to cash is just a way for me to stay in control. Many traders never go to cash and are very reluctant to do so. That’s fine. Everybody is different and every trader has a different time frame. For me personally going to cash is no big deal as I can go back to being fully invested in a matter of hours.
This week’s video outlines many ways to monitor market health going forward. Monitoring a stock’s behavior around the MA 200 is one way. Monitoring if we see quick, potentially very bullish, V-shape recoveries after pullbacks is another way.
Right now, I want the market to provide me with more information. Does the selling intensify? Can the strongest stocks withstand further selling pressure or can they move up while the overall market remains under pressure?
Keep in mind there is no need to make predictions in order to make big money in the markets. What is helpful though is to think about various scenarios that might unfold. When a scenario unfolds according to plan it is a sign you are in sync with the market. Then, odds are in your favor and you can start being more aggressive again.
2. Main Video: High Potential Stocks – 1h 01min
Stocks covered in the video:
- Bad Price action – Back To Neutral Stance —> Price not meeting my expectations —> Back to 100% cash —> Am now in wait & see mode
- Stock Review: S&P500, IWM, DOCU, AMBA, KEYS, TAN, SPWR, SEDG, ESTC, GWRE, TDOC, FSLY, MU, LRCX, AG; Behavior around the MA 200: OKTA, MDB, NSTG, CRM, SMAR
- High Potential Stocks: Not looking to initiate new positions
3. Conclusion
The market remains extremely choppy. Leaders cannot buck the trend and constructive bullish set-ups are very tough to find.
This is the kind of market where is does not pay to be aggressive. I am back to the sidelines waiting for better set-ups to emerge.
4. Watch List
Watch list link with the best charts the market has to offer right now:
Use it to dig deeper, replenish your own watch list and ultimately come up with your own ideas.
Free website: www.tischendorf.com
Twitter: https://twitter.com/Tischendorf
5. New Members: Where To Start & Key Topics
Stop losses – TL 3
https://members.tischendorf.com/2015/12/12/tischendorf-letter-issue-3-what-invalidates-a-trade/
Idealized Optimal Chart Pattern + Pareto’s Principle – TL 46
https://members.tischendorf.com/2016/10/09/tischendorf-letter-issue-46-patience-and-discipline/
Margin – TL 53
https://members.tischendorf.com/2016/11/27/tischendorf-letter-issue-53-melt-up-potential/
Consolidation Patterns – TL 54
https://members.tischendorf.com/2016/12/05/tischendorf-letter-issue-54-monitoring-consolidation-patterns/
Trading Psychology: Fear – ‘That First Dive’ – TL 63
https://members.tischendorf.com/2017/02/05/tischendorf-letter-issue-63-this-is-a-bull-market-keep-it-simple/
Concentrated vs. Diversified Portfolio – TL 84
https://members.tischendorf.com/2017/07/03/tischendorf-letter-issue-84-sector-rotation-continues/
Drawdown & Gain Required To Break Even – TL 146
https://members.tischendorf.com/2018/10/13/tischendorf-letter-issue-146-waiting-for-volatility-to-calm-down/
6. FAQ Section
Q: Do you run a model portfolio? Do you send out trade alerts?
A: There is no model portfolio and I do not provide any kind of buy or sell signals or alerts. I also do not publicly keep track of my personal trades. I’ve been actively trading for 20+ years and I have come to understand that an educational newsletter is in the best interest of members. The focus is on teaching traders ‘How to fish’.
Q: When is the newsletter published?
A: There is no fixed schedule. Depending on how busy I am, the newsletter can be published as early as Friday or late at night on Sunday.
Q: How do I know if the most recent newsletter is already available?
A: There is absolutely nothing you need to do. Whenever a newsletter is published you will get an email notification including a link to the current issue.
Q: A video is not loading or has stopped playing. What should I do?
A: Simply hit the refresh or reload button in your browser. That usually solves the problem. The videos are hosted on Vimeo. So if there is a playback issue with Vimeo, there is nothing I can do. These type of issues are very rare. You can always check Vimeo’s status page to see if they are experiencing technical problems: https://www.vimeostatus.com/
Q: How do you scan for stocks?
A: My main scan is a very simple scan looking for stocks with above average volume. There are no secrets involved. It is all about discipline. The key is to do it every day. I use stockcharts.com to run the scan. If you decide to sign up for their chart service please use my email mail@tischendorf.com as a referral. I will then get a free month. Here is the code or scan expression I use: [type = stock] and and [daily volume > 300000] and [daily close < 150] and [daily volume > daily sma(50,daily volume) * 3] and [daily close > daily sma(50,daily close)] and [daily close > 0.55]