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Trading Plan for Monday, April 1, 2019

Last week was one of the slowest trading weeks I’ve had this year, just a continuous tight range between 30-31. There have been a few opportunities within the range, but I’ve just resigned myself to waiting for the either the breakout at 31.50 or the test at 29.61. Anything in between is just going to get chopped up.


I think the biggest reason for the slow week is that my bias is bearish, however the XOP is showing bullish characteristics. When the two don’t mesh, hesitation creeps into my trading and I get too cautious, especially with scalp type trades within the range. When there is no clear direction, sometimes it’s best to retreat to the sideline and wait to enter when the market reaches points of interest that mean something and convey a more certain direction.


This week is going to be a difficult one, as there are so many different ways the XOP could go. Top 5 paths from the decision tree:

1.  A positive open on Monday and a rip straight to the top of the range at 31.50.

2.  A dip to 29.61 and then a run at 31.50

3.  A dip to 29.61, a failure, a run at 28 and a failure there to 24

4.  A dip to 29.61, a failure, a run at 28 and a big bounce which fails at 29.61 and collapses

5.  A dip to 29.61, a failure, a run at 28 and a big bounce which breaks back above 29.61 and then makes a run at 31.50.


I know that sounds like a lot of options, but it helps to try and stay one (or five) steps ahead of the market so you know how to react to whatever is presented. One thing I don’t want to see is a gap up open to 31.50 (or a sharp opening drive there) which gets clearly rejected. If that happens early Monday, the rest of the week could be straight downhill. I’m bearish in my view right now, but I don’t see a short on that kind of action being very profitable. If this market does breakout, it could run so quickly that executing a tight stop on a short could be impossible. While a short might be likely and profitable, it would be brutal if the squeeze happened on a breakout.


My ideal trade for Monday is a pullback to the 29.61 level and then a run at 31.50 for a possible breakout (path 2). The most useless path would be more consolidation in this 30-31 range. If the XOP continues to consolidate, I’ll be on the sidelines.

I’ll try to post daily plans this week if things are moving. I didn’t really post much last week because there really wasn’t much to say given that tight range.



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