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You may have seen the headlines.

I didn’t shy away from markets on Friday despite the S&P 500’s 2% pullback, and I won’t shy away from markets today either.

What I will do is adapt to markets with new technical levels in mind.

Because during times like this, I stay calm and remain focused on my long-term goals as a trader.

First, I’m grateful for today’s low-impact economic calendar.

Because with Friday’s pullback in mind, my primary task today is working with new support and resistance levels in the SPDR S&P 500 ETF (SPY).

I use support levels to buy short-term dips (buy SPY Calls).

I use resistance levels to short short-term tops (buy SPY Puts).

The only place I go to study these levels is straight to the charts.

No CNBC. No newspapers. No billboards. Just the charts.

I’ve been practicing and preaching this process for years as focusing on the sound and filtering out the noise allows me to create clear, logical trading plans and trade ideas for the day ahead.

Today’s chart of the day – a SPY daily chart – shows me an imperative resistance level for the day ahead that I will respect as I plan entries, targets, and stops.

SPY Daily Chart

SPY is currently trading just below its 20 SMA (simple moving average) and its 21 EMA (exponential moving average); both of which are resistance levels.

I don’t go long (buy SPY Calls) into resistance levels; instead, I patiently wait to see if SPY starts to reject them and use resistance levels as short-term tops for short positions (via buying SPY Puts).

Therefore, if SPY continues to trade just below its 20 SMA and 21 EMA, I’ll be interested in trading SPY to the downside.

 

Think simple,

Davis Martin

Author: Davis Martin

Because that’s what the SPDR S&P 500 ETF (SPY) is telling me.

Because trading your heart over your chart can be expensive.

Because you may have had that problem.

Because I’ve fought through that problem.

Because I’ve solved problems with one solution (the trade of the day).

“Trade the chart, not your heart…”

… an incredibly underrated quote.

If you read the most recent edition of SPY Daily, you know I wanted to trade SPY to the upside.

Because SPY was trading right above its 20 SMA, a support level at the time.

I built the Market Navigator trade of the day with the chart (not my heart).

SPY Nov 26 467 Call

I’ve been doing this for over five years, and I strive to improve every day.

There are thousands of stocks out there that add additional risk.

That’s why I focus on one trade – on one stock – at one time, allowing me to enter the market confidently.

It’s an addiction to something extraordinary; the Market Navigator trade of the day.

With today’s economic calendar being non-influential to the stock market…

my attention is on SPY’s daily chart, today’s chart of the day.

SPY Daily Chart

While SPY is down this morning, SPY appears to have found short-term support on its 34 EMA.

EMAs (exponential moving averages) are similar to SMAs (simple moving averages) – but they’re heavily weighted closer to recent price action.

As a trader, I like recent price action, and that’s why I use the 34 EMA on my daily charts – and as long as SPY holds its 34 EMA support – I’ll be interested in trading SPY to the upside.

Ahead of sending today’s exact trade of the day to Market Navigator members, I’ll leave you with the most recent edition of SPY Daily.

(In which I detailed SPY’s 20 SMA)

These are lessons I study and teach every day.

And I hope they’re beneficial to you as you develop as a trader.

Here’s your link.

Bookmark it. 

 

Think simple,

Davis Martin

Author: Davis Martin

A handful of traders I know don’t enjoy news-driven markets.

But with markets trading in a tight range this month, I’m thrilled for today’s session.

Because today’s session is stacked with catalysts.

See what I’m saying here?

Today’s economic calendar will keep media outlets busy hour-by-hour, minute-by-minute.

Anticipation of an event will linger. Results of that event will be released, speculated upon, and that process will repeat itself all day.

I stopped paying attention to media outlets on days like today years ago (and I’m glad I did).

It’s part of my approach to acting on the Market Navigator trade of the day with less noise and more sound.

By doing my research ahead of time, I can take full responsibility for my decisions backed with due diligence through a headline-filled day.

And today’s economic calendar is showing me a time I’m tingling over.

Because there are no economic calendar catalysts scheduled for 9:30 AM ET – when I’m active as I teach and trade the Market Navigator trade of the day – simultaneously.

Assuming I’ve closed my position ahead of a catalyst release, I won’t be taking any financial risk through the barrage of scheduled catalyst events; make sense?

I’ll hold some of a position through catalyst events on occasion, but I can’t predict what will or will not be in my portfolio hours from now as I’m typing in the premarket.

I’ll start today’s technical analysis with a SPDR S&P 500 ETF (SPY) daily chart, today’s chart of the day.

SPY Daily Chart

As I’m typing, SPY is holding 20 SMA support. I don’t short (buy puts) right into support levels as I don’t believe that mentality is a wise approach to the reward-to-risk rationale of trading.

My favorite trades are trades I make with Market Navigator members – and as long as SPY trades above its 20 SMA today – I’ll be interested in trading SPY to the upside.

 

Think simple,

Davis Martin

 

P.S. Looking to expand your trade of the day knowledge during a holiday-shortened week in the market? Visit & bookmark this link.

Author: Davis Martin