This weekend, I will begin recording The Master Trader Technical Strategies – MTS course. I’m excited!
For that reason, the written comments are shorter, but I will cover the broader markets and internals in the videos.
The MTS course covers an in-depth understanding of technical analysis, inter-market analysis, market internals, trader psychology, position and money management, specific patterns and strategies as well as a complete section on gap trading. MTS is a complete course for all traders and investors.
DOW JONES INDUSTRIAL AVG.
Above is the chart of the Dow Jones Industrial Average that we review each week. Clearly, this market refuses to pull back and has begun to accelerate to the upside. At some point, it is going to pull back but will that be from 25,000? It’s certainly not out of the realm of possibilities the way it is moving.
This week, I added the 20-period moving average (blue line) to the chart. As you can see, the distance from it is growing and will pull back to it at some point — or it will catch up with prices by them correcting sideways over time.
There were two more unfilled gaps left under current prices last week to keep track of. The lower ones could stay unfilled for quite a long time, but now computers can keep track of them by setting alerts there.
If those gaps get filled a year from now, for example, you may not even be aware of them since you’re not looking at that area on your current chart. Set the alert.
IBM was the biggest mover of the Dow components last week moving up just over 10%, most of that on a gap higher. However, it had help. United Healthcare (UNH) was up almost 8% for the week, Travelers (TRV) came to life and was up just over 5% and Johnson and Johnson (J&J) was up just over 4%.
Even General Electric (GE), the Dog of the Dow, had a huge reversal after a gap down on its earnings report and ended up close to 4% on the week. Certainly looks like the start of a bottom, but it will take time to build a base.
Procter & Gamble (PG) was the worst performer down just over 5% on the week. The daily Bearish Wide Range Bar (-WRB) that formed on huge volume signals lower prices for this stock. However, at some point, you can be sure that the long-term holders and institutions will be back to pick up shares at lower prices.
The other Dow components reporting earnings this week start on Tuesday.
Tuesday the 24th are United Technologies (UTX), 3M Company (MMM), McDonald’s (MCD) and Caterpillar (CAT).
On Wednesday the 25th is, Boeing (BA) Coca-Cola (KO), and Visa (V).
On Thursday the 26th Intel (INTC) and Microsoft (MSFT).
On Friday the 27th are Exxon Mobil (XOM), Merck (MRK) and Chevron (CVX).
Those are the ones reporting in the Dow this week and there is a huge list of others outside of the Dow. Be sure to check the earnings calendar on open positions. Of course, we will always check before any recommendations are provided to you.
BROADER MARKETS
[s3mv fileName=’October+2017+Letter/broadermarkets171023.mp4′ fileType=’video’ source=’s3′ width=’800′ height=’480′ splashImage=” preLoad=’Y’ autoPlay=’N’ belowVideoHTML=” cuePoint=” redirectURL=” pauseAtCuePoint=’N’ fixedSizeVideo=’N’ isSecure=’Y’ bucketname=”]
TREND MATRIX AND INTERNALS
[s3mv fileName=’October+2017+Letter/trends_Internals171023.mp4′ fileType=’video’ source=’s3′ width=’800′ height=’480′ splashImage=” preLoad=’Y’ autoPlay=’N’ belowVideoHTML=” cuePoint=” redirectURL=” pauseAtCuePoint=’N’ fixedSizeVideo=’N’ isSecure=’Y’ bucketname=”]
New Trade Ideas
Below is a daily chart of Papa John’s International, Inc. (PZZA).
Trade: Under $69.36, consider buying Nov (11/17) $75/65 bear put debit spread (25 DTE) for mid-point (closed at $5.33/share). Note: Earnings are 10/30 so we will close before.
Technical Setup: Bearish consolidation breakdown all time frames, relative weakness to market.
Option Strategy: Bear Put Debit Spread (BPS).
Stop Loss: $71.12.
Below is a daily chart of Autodesk, Inc. (ADSK).
Trade: Over $121.50 (hourly resistance), consider shorting Nov (11/3) $116/110 bull put spread (11 DTE) for mid-point but with limit of $.42/share (closed at $.48/share).
Technical Setup: Bullish Gap breakout from Buy Setup and Bottoming Tails above r20/50-MA daily, bullish breakout weekly to all-time highs.
Option Strategy: Bull Put Credit Spread (BPS).
Stop Loss: $116.88.
Below is a daily chart of AerCap Holdings N.V. (AER).
Trade: Over $53.19, consider buying Nov (11/17) $50 calls (25 DTE) at mid-point but with a limit of $3.60 which reflects a maximum of $.40/share extrinsic value (time decay). Note: Earnings are 11/2 so we will close before.
Technical Setup: Bullish Gap Breakout from Buy Setup at the r20-MA daily to all-time highs.
Option Strategy: Long Calls (LS).
Stop Loss: $52.61.
Adjustments and Comments on Open Advisory Letter Trades Note: Our Trade Updates are timely posted in a separate Report in the Member’s Area. Please see that document for a current reflection on all Open and Closed Trades since the spreadsheet updates immediately and will always be more current than this e-mail update. Thank you.
NOTE: Please see Master Trader Guidelines for Trading the Open and Gaps in Member’s Area for rules on trade entry, gaps, etc.
Below is a link to individual videos explaining in greater detail the definitions of the main option trading strategies used in the Master Trader Option Strategies Series for Investors and Active Traders to generate wealth and income.
Description of Master Trader Directional and Income Option Trades can be seen HERE
Please Sign Up for Text Alert Service for Timely Trade Updates!
As a subscriber to the Master Trader Advisory Letter, we would like to text you alerts for updates to open positions and or new ones in a timely manner. These will also be posted to the Spreadsheet in the Member’s Area and new recommendations will also be emailed.
However, a text message to your mobile device will happen within seconds. To get our text alerts, please text the word mastertrader (one word) to 33222
Happy trading! If you have any questions or comments, please e-mail Greg Capra at Greg@mastertrader.com or Dan Gibby at Dan@mastertrader.com
All the best,
Greg Capra
Managing Director of Master Trader
Pristine’s Founder and Creator of the Pristine Method
Dan Gibby
Chief Options Strategist
Follow Greg on Twitter, YouTube, and StockTwits to get real-time updates and education:
Twitter: @GregCapra
Stocktwits: Greg_Capra
youtube.com/c/mastertrader (please subscribe to receive all the timely stock market updates)
NOTE: Master Trader will show opening and closing prices of all stock and option trades. We do not recommend proper share size for your particular trading style, risk tolerance, or account balance. We urge you to calculate your own share size based on your individualized risk parameters, Trading Plan, and familiarity with the proposed trade strategy and risk.
NOTE: Master Trader and its representatives might have existing positions in these and other trade recommendations before or after suggested herein. Additionally, we often manage them differently for internal purposes based on different risk parameters than noted herein.
