Last update: August 2021

≈ A common setup in charts this week ≈

The last week of price action has been interesting, to say the least. Markets have been bullish for months, without any significant sell-off, until last Thursday where prices fell between 4-6% across major indexes. This created a 3 red candle pattern on the S&P 500 for the first time since mid-March. 

What was the catalyst? Lots of finger-pointing went to the Fed’s policy statement, Re-opening risk from Covid-19 infections, and general overbought conditions. 

Now, the market has rallied on Monday to start the week and is up strong in early action Tuesday to nearly erasing the losses from Thursday’s sell-off.

When price, in a bullish uptrend, comes back into key technical levels like rising moving averages, support/resistance zones, trend lines, and Fibonacci levels we call those technical catalysts. 

Technical Catalysts are one of the 6 criteria we use in the S.T.E.P. System to score the Bullish Retracement pattern. All 6 criteria include:

1. Must have a Bullish Uptrend
2. Must be a Liquid Tradable Instrument
3. Must have a Corrective Retracement
4. Must have a Technical Catalyst
5. Must have a Signal Candle (for setup)
6. Must have a Confirmation Candle (for entry)

There were many Bullish Retracement setups across the market the past few days, some of them confirming and tradable. Were you prepared to take advantage of the price action? 

If you don’t yet know how to trade the Bullish Retracement, the best thing to do is to focus on education, take the S.T.E.P. System Course, review content on Tackle Trading and show up to the live webinars and participate with the coaches to get yourself trained.

Successful trading requires proper education, proper preparation, and then proper execution. When things line up well, it is a beautiful sight to see. Make it a goal to develop your rules clearly, on how to trade all four core patterns, and build your routines so that you can run your trading business effectively on a day-by-day basis.

This last week in the market goes to show us, you need to be ready because we don’t get to determine when and how price develops into what patterns. We simply can identify the setups, prepare to trade them, and execute when they give us proper entry points.

---

Chart of the Day: $RCL Daily Chart

Royal Caribbean has developed a Bullish Reversal trend, and recently the retracement in price has brought it back into a technical catalyst with a good setup.  It was featured over this past weekend on our Stock Report. In the chart above, you see the ETF SPY with a 5 minute, 1 hour, Daily and Weekly candle chart setup.

---

Video of the Day: Should I Buy Out of the Money Call Options?

The temptation to buy out of the money options is seductive for new traders, because it is possible to hit the occasional home run. But there are some very important rules for buying OTM call options that one must understand if they don’t want to waste their money buying low probability options and lottery tickets. Watch this video to understand the Pro’s and Cons and rules for buying OTM options.In this video, Coach Noah shows you exactly how to do a multiple time frame analysis on a swing trading.A look at how to determine the MMM or the expected move for a stock on earnings.

---

Financial freedom is a journey

Sign up now and gain unfettered access to all of the quality content and powerful Scouting Reports that our Pro Members enjoy for 15-days absolutely free with no strings attached and let us show you what your trading has been missing.

---

Legal Disclaimer

Tackle Trading LLC (“Tackle Trading”) is providing this website and any related materials, including newsletters, blog posts, videos, social media postings and any other communications (collectively, the “Materials”) on an “as-is” basis. This means that although Tackle Trading strives to make the information accurate, thorough and current, neither Tackle Trading nor the author(s) of the Materials or the moderators guarantee or warrant the Materials or accept liability for any damage, loss or expense arising from the use of the Materials, whether based in tort, contract, or otherwise. Tackle Trading is providing the Materials for educational purposes only. We are not providing legal, accounting, or financial advisory services, and this is not a solicitation or recommendation to buy or sell any stocks, options, or other financial instruments or investments. Examples that address specific assets, stocks, options or other financial instrument transactions are for illustrative purposes only and are not intended to represent specific trades or transactions that we have conducted. In fact, for the purpose of illustration, we may use examples that are different from or contrary to transactions we have conducted or positions we hold. Furthermore, this website and any information or training herein are not intended as a solicitation for any future relationship, business or otherwise, between the users and the moderators. No express or implied warranties are being made with respect to these services and products. By using the Materials, each user agrees to indemnify and hold Tackle Trading harmless from all losses, expenses and costs, including reasonable attorneys’ fees, arising out of or resulting from user’s use of the Materials. In no event shall Tackle Trading or the author(s) or moderators be liable for any direct, special, consequential or incidental damages arising out of or related to the Materials. If this limitation on damages is not enforceable in some states, the total amount of Tackle Trading’s liability to the user or others shall not exceed the amount paid by the user for such Materials.

All investing and trading in the securities market involves a high degree of risk. Any decisions to place trades in the financial markets, including trading in stocks, options or other financial instruments, is a personal decision that should only be made after conducting thorough independent research, including a personal risk and financial assessment, and prior consultation with the user’s investment, legal, tax and accounting advisers, to determine whether such trading or investment is appropriate for that user.