Reading Charts to Manage Trades

THE WEEK

Another wrench was thrown into this week’s trading by the FEDS.  There is some disagreement among the board of governors on whether to start lowering interest rates, keep them the same or bump them up.  The discussion  happened on Thursday in the early afternoon causing increased sell offs by traders and a hard Market drop.

Here’s the day chart of Thursday showing the Market plummeting.   That controversy stopped the slow steady up climb we have been experiencing

The good news is the price/action started to recover on Friday.  I was able to salvage most of my trades by the upturn.

LOOKING AHEAD

This week both the CPI (Consumers Price Index) and the PPI (Producers Price Index) report March figures.  CPI reports on Monday and the PPI on Thursday.  Both reports are released an hour before the opening bell of the Market.  Because both reports are part of the data the Feds use to evaluate the economy and whether adjust interest up or down, there is a strong reaction by traders that usually happens before the Market and in the first hour(s) of trading.  I am expecting both reports to be decent and not rock the boat too much or for too long.  I am more concerned by the PPI’s report on Thursday.  If the Market reacts strongly, it doesn’t allow much time to adjust trades before Friday’s options expire.

HOW AM I DOING?

All my trades this week were winners expect for one.  I had an Iron Condor on HUM, Humana, a health insurance provider.  There was an announcement after the Market closed  on Monday regarding Medicare Advantage and Part D Programs.  HUM plummeted overnight and I couldn’t find a way to salvage the PUT Vertical of my trade. 

This week’s Deep Dive Subject came from the Quantum Trading Roundtable Group

How to read the charts to manage the trade

See You on Thursday’s Webinar