The bullish and bearish trades we are in need a harsh review. Below, we will look at each one and map out the next steps. But things are simply not what they seem. There was an assumption that post election, uncertainty would fade and the markets would continue trends that were in play. The reality there is more uncertainty about how the political changes will play out in the markets.

I feel strongly that markets are efficient and will settle into their trends again pretty quickly. In fact, premarket trading is showing tech giving back some of it’s wins from yesterday. Let’s take a look at each trade we have been following and how it looks on the chart.

USO

It seemed on Monday that the drop in oil was a dip to buy up and than the conflict in Iran would escalate right after votes came in. The next move was the opposite and the bottom fell out of the dip. It is very unlikely the conflict will simply end and oil will flow freely immediately but for now it is best to hold on to any value left in this trade. From 9.65 it is down to 4.78. There is an alternative to wait it out and see if prices jump up but the RSI is showing momentum downward and the MACD has s clear bearish crossover so best to take the lumps on this one.

ACI

Albertsons looked to slide steadily but managed to rebound a bit. We had identified that this was a higher risk trade and with it being so cheap, a big drawdown like we have seen is not out of character for this type of trade. The contract still has about 6 weeks til expiration and the MACD is teasing a crossover in our favor on this chart. Also, the bounce up is at a key level of previous resistance and could provide the downward pressure we need. This is a hold but if it breaks that level today, look to exit.

HIG

Hartford never broke below the 200 day MA and offered an entry for a good put trade. I am moving this down on the watch list.

SQQQ

This is a trade that we have been watching with a much longer arc than these others. We started looking at it back in early September as the risks of a big tech reversal seemed to be increasing. We were able to grab a bit of a win last week on it and then jumped back in with a higher strike (SQQQ is an inverse ETF so it goes up with QQQ goes down and is an easier way to trade the downside). With the premarket showing signs of the slide resuming, this is also a hold and watch closely. It was at 3.85 when we took it on Monday and it is down to 2.37. Not insignificant but even on the daily chart above you can see the down trend is still intact.

The big winner this week has been Keith Harwood’s LUV trade he outlined in our Eye Opener video chat. It was at 2 when he spotted it and shot up to 3.68 before the close yesterday. If you are interested in getting his alerts instantly with full support on his trades, reach out to his team here or give them a call at (800) 883-0524. Tell them John Boyer sent you.

Keep learning and trade wisely,

John Boyer

Editor

Market Wealth Daily