Hey Tackle Traders,
When my son was little his famous words to me when I did something that did not please him like I don’t know…. punish him for bad behavior was “Mommy, I’m not your friend!”. I’d smile and look at him with the most loving eyes then get real close to him and say “who said we were ever friends” then walk away fast to mend the broken pieces of my heart because a toddler didn’t want to be my friend. Lol! He understood that extent of the offense determined the length of punishment. Minor offenses less time, major offenses more time. Eventually, all was forgiven, we’d have a pep talk and because I’m a mom, an ice cream treat always bought back the friendship we never had.
It’s hard to believe that summer is upon us now being that part of winter and spring season came and went while we were indoors eating, sleeping, and watching tv. For us traders, we saw horrible economic data come out week after week, from unemployment claims, earnings report, unemployment rate, housing reports, consumer spending, yet the market just continued to shrug it off like one had nothing to do with one another. Yes we all know that the economic data is backward-looking and the market is forward-looking but do you mean to tell me that the beating though swift the market took in February and March was it? Let us not forget that before Covid-19 become the most uttered word in every household, the market had been trending up since March 2009. Many called the next recession the everything bubble before the pandemic. Now mix the everything bubble with a pandemic that shut the whole world down for almost 3 months, horrendous economic data, millions of people unemployed and all we have to show for is a 35% drop in 32 days from the S&P followed by a 45% upward movement in 86 days? Is that it? Really? Imagine the worst thing you ever did as a kid and the punishment you received only to hear your parents tell you to pack your bags because after your punishment you’d be going to Disney World.
If that was my mom I’d say no thanks, I’ll take my punishment and stay at home because Disney World is where she’d kill me but knowing my kids, they’d never pass up a chance to go on a trip. However, they would probably check my temperature to make sure I wasn’t sick or check the recycling bin for empty bottles of wine. Lol. They’d go along and get in the car keeping a close watch from the back seat to make sure I didn’t have arm reflexes to smack them in the back of their heads for whatever they did wrong. That’s how the market feels to me. The short-lived bear market didn’t feel like it was enough of a punishment and on top that, every bad report thereafter keeps getting rewarded by the market. So what are we to do as traders? Well, the same thing you’ve been hearing from almost every coach. Smaller position sizing, stop losses and take profits early and often. So, we continue to trade price movement and this week was no different. The theme this week at Tackle has been pullbacks and breakouts so I thought I’d continue with the theme and share some breakouts that occurred this week. CRM was one of them
CRM was on a sideways/neutral channel a few weeks while patiently waiting for it for break above 183/185 range.
Things I look for when trading breakouts are, increase in volume on the breakout, continuation in momentum.
Average shares traded have to be a million or more and tight bid/ask spreads (no more than .20cents on Option chain) plus high volume and open interest.
So while the market continues to reward bad behavior and go unpunished, grab your favorite beverage of choice and join me tonight at 8:30 pm est is our Women In Trading webinar and lets have a fun time talking all things market and discipline practices. See ya tonight ladies! You can find the login information on the events page below.
Until next time Traders!
Emily Muiruri was born and raised in Nairobi, Kenya before her family moved to the US and settled in Maryland, Emily began her trading journey in January 2015 after 17 years of Property Management in the Self-Storage Industry. Like many new traders, Emily started off with directional trading strategies such as long calls, long puts and very little in cash flow strategies. Over time that has changed and now her core trading strategies are cash flow based such as are Covered Calls, Naked Puts, and Iron Condors. Though she is still a student learning and enhancing her trading skills, she has a strong desire to teach women to take control of their finances and become traders. Writing blogs is one of the ways she’s is looking to spread the word and get more women involved. Emily knows that with the right education and trading system women can be successful traders.
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