August 17, 2018 Premarket – 100% Avoiding the 2018 September-December Cyclical Stock Market Bear

Below is the 8/17/18 Premarket commentary. In it I said something, which was extremely prescient looking back now in a rear view mirror –

“I’m getting out of the stock market, 100% cash. The occurrence of tops in July/August. I’m not finding many setups”.

I was a couple weeks early, but it’s a part of my approach to risk in markets, first caution, then concern, then the confirmation. Tops (bottoms) are a PROCESS, so should be your strategy – A PROCESS.

But as discussed since 2009, this is a secular bull market, all selloffs will be within the context of that. Many many posts have been done about that major trend, like this one:

The 8/17/18 comments:

The summer doldrums trading has been, and, is going on in the stock market. The occurrence of tops in July/August was discussed previously. And the SPY charts from the previous 5 were discussed as models. I’m always looking for/trying to recognize stocks which are – setting up for breakouts, turning the corner to the upside of accum or reaccum, setting up for bounces (smaller stocks), or setting up for springs. I’m not finding many setups in the bigger-type stocks. Small and intermediate ones, there are always opportunities there (and the daytrade stuff), but there are less opportunities. Speaking of daytrades, I totally screwed up a MOSY trade yesterday, losing trade, missed the low and chased it.

I am out of all position trades,100% cash in my bigger-type stock account.  My focus will now be on my account used for the small and intermediate stocks, as discussed previously. That discussion below.

In the last week or so, I sold INTC, long-time 10 month holding IMMU, VNOM from the 4/2 stock list. And yesterday – I sold AMD from the recent bko in the 17s, used the rally in the SPY into the top of the gap. That SPY gap resistance was drawn in with Wednesday’s SPY chart. Also, I lost 5% on AMAT sold in after hours, it came out with earnings. It was bought very well, right into the spike low spring setup two weeks ago. I was up literally within minutes on that purchase, never down on it, until yesterday obviously, and usually those work well for me, and thought it had more in it. Yes should have sold before earnings, but I was never down on this thing, and just knowing those can be big winners. Oh well.

In the smaller sector of stocks – still long YEXT, and 1/2 of ARQL, plus 1/2 of WIN. Those discussed previously. ARQL was on my 4/2 stock list, has been a huge winner, discussed again recently, very good day in it yesterday and I sold 1/2 at 6.32, into the spike high, from the dip/spike low at 5.75 – charts – ARQL  ARQL. I also did get off the sale in NIHD yesterday at 5.52. Pure box trade setup for me from 5.10.

CVSI has been discussed almost every single day since Aug 8. It has been one of the best trading stocks all year – multiple opportunities in it from 3.50 on Aug 8. It hit a new high for the move yesterday at 5.87. Have you traded it? If not, why? As discussed with CVSI a few days ago, it will put in a top, but all of the opportunities there have been (so far). People seem to always be attracted to weak stocks, near their lows. That can be a specific setup. Especially (only) into springs/spike lows. But the easier, simpler, higher probability, smarter, more efficient, trade is to buy strong stocks, into dip-type setups, or on the bkos, or on the (maybe) pre-bkos. For me, the stronger the better. But I will try to catch turns, in a 123 complex bottom setup, I will attempt to buy right into the lows, but ONLY on a spring/spike. Otherwise I will wait/watch for signs of a turn, and then see if there is a res line which the stock will “want” to break thru (breakout). I will NOT buy the low, and it may be a day or a few days of watching, before even thinking about taking a shot.

mm
About traderscott 1128 Articles
Trader Scott has been involved with markets for over twenty years. Initially he was an individual floor trader and member of the Midwest Stock Exchange, which then led to a much better opportunity at the Chicago Board Options Exchange. By his early 30’s, he had become very successful in markets, but a health situation caused him to back away from the grind of being a full time floor trader. During this time away from markets, Scott was completely focused on educating himself about true overall health and natural healing which remains a passion to this day. Scott returned to markets over fifteen years ago where he continues as an independent trader.