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Trading Plan for Thursday, June 18

Wednesday didn’t have much to offer. Sometimes you can create a plan and it just doesn’t develop. I took the XLE trade on the open but it was pretty clear that it wasn’t going anywhere. I cut it breakeven and I don’t think the XLE ever got back above my entry price for the rest of the day. It closed at 39.69. Energy was a weak sector and I don’t see it doing much today either.


One quick note for people who don’t follow me regularly, I’m a daytrader and these plans are only for one day’s worth of market action. They don’t carry over day to day and none of these trades are meant to be carried overnight. I’m strictly a technical daytrader and I DO NOT use fundamentals for my trading. If you are looking for trading advice based on fundamentals, then I’m not the person for that advice.


The theme for Wednesday was to let price drift down to the Monday high area and then take it long. The bounce never happened and most energy names closed below Monday’s highs. Today I’m looking for more downside and a possible run at the lows from the open on Monday. The important points for the XLE remain 38.71 and 37.00. The only place I’ll try a long today will be 38.71. I’ll try either a straight long or a reclaim long depending on where the SPY opens.


The key for today is the IWM. It has been in a clear trend up since the March lows, but there is a downtrend line from the June 8 highs that is blocking further movement up. I posted a chart in the morning plan Twitter thread.  Energy will follow the IWM. The important points for the IWM today are 142.75, 143.39 and 145. If price takes out 145, then it’s probably headed to the 154 area next week. On the downside, watch 141.32. If that breaks, then there really isn’t much to stop price from heading back to the Monday opening prices which were the lows for the week so far. Keep an eye on the relative strength between IWM and XLE.


The important points for the SPY are 312.69 and 315.64 on the upside and 310.36 and 307.67 on the downside. While the IWM filled the gap from last Thursday, the SPY never did. If price takes out 315.64, there’s room to run to about 319 and close that gap. I’m willing to give the 315.64 area a breakout trade long if the opportunity presents. Use a .50-$1 stop for a possible $3 reward. If price gets to 319, I’m still looking to get short there.


I don’t have much for individual energy name trades today. This market could really go either way and the more productive approach today is to trade the overall IWM and SPY off the structure set out above. The only theme that stands out for energy names is that many of them closed below the current week’s VWAP. If the IWM moves up and gets rejected, then I’ll be looking for shorts on energy names that hit resistance at those weekly VWAP points. Examples:

EOG short 53
MPC short 38, VLO short 64
XOM short 47.50
XOP short 59


I’m probably not playing any energy names on the long side today since there really isn’t much structure to use as a stop and there’s too much supply overhead, not good combination. Let’s just hope there’s some movement and opportunity today and we don’t get a repeat of Tuesday/Wednesday. Good luck.

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