- Market Overview: S&P 500
- Main Video: High Potential Stocks – 57 min
- 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:
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Another week where staying defensive is paying off. This is a market environment where most traders will look back in a few months and wish they had done nothing.
Of course doing nothing when one ‘should do nothing’ is easier said than done. We all have to constantly fight our inner demons, our urge to ‘do something’ and at times our lack of discipline.
The key is to not let any kind of market environment discourage you. Of course, I wish I certainly wish I was the perfect trader, we probably all do, but the truth is that this goal is basically unattainable.
The real path to success is to learn from our mistakes and to get better over time!
You’ve most likely heard this many times:
Trading is not a sprint. It is a marathon!
It is surviving challenging market environments without giving back too much of our previously accumulated profits that will make all the difference in the long run. Hence, my focus on ‘staying defensive’.
This is what separates professional traders from amateur traders:
Not giving back too much during market pullbacks or bear markets.
As I stated in this week’s video, and in many past videos, protecting capital is not the sexiest topic. Many traders would prefer to ‘get picks’ every week. But there is a time to be aggressive and there is a time to be defensive. Now is not the time to be super aggressive. Resist the urge to put on one new trade after another just because you think you ‘need to do something’.
Instead, focus on staying in control. Focus on preserving capital. Only trade the very best set-ups and put on smaller positions than usual.
When trading is difficult, back off, trade less and trade smaller.
As you can see in the S&P 500 chart above, I haven’t redrawn the trend lines in order to make it easier to see what is currently happening. We could see an oversold bounce anytime, but for now this looks like the market tone has potentially changed. Individual stocks can move down significantly and lose support in a heartbeat in such a environment.
2. Main Video: High Potential Stocks – 57 min
Stocks covered in the video:
- Staying Defensive vs. Making Predictions —> News-driven markets are extremely challenging —> Oversold bounce vs. Choppiness
- Stock Review: BRK-B, ARKK, BABA, GOOGL, SNAP, AMD, CGC, DMRC, ROKU, TWLO, TWTR, OKTA, AVGO, XLNX, PLAN, PDVW
- High Potential Stocks: Not looking to initiate new positions
3. Conclusion
As long as we remain in a news-driven market the best course of action is to remain defensive.
That does not mean one should be 100% in cash. But being cautious and trading lightly is advised.
Maybe a final wash-out is all we need to see before a meaningful bounce can materialize.
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]