Oil and Gas Stocks Outlook for Thursday, September 14
Sep 13, 2017 Trading Blog
Here’s to you Jim Chanos, hope you had a great day with those shorts, LOL. (Edit: First, I have no problem with Chanos or Buffett and definitely don’t ever want to make fun of anyone losing money, that is just bad Karma. What I do have a problem with is people using their reputation and using the media to pump their positions and then dump them on unsuspecting people who get short because they see an “expert” on CNBC who is pumping their short position. Hopefully, someone like Chanos would never take advantage of the public and cover into the panic selling they directly caused through their own remarks. But I probably expect too much of people.)
Wow, now that is what I’ve been waiting for over the last couple months! A great trading environment today and everything you could want to get this trend turned around and going in the right direction. I had two concerns in yesterday’s outlook, and today took care of both of them. We took out last week’s high and we took out the 50 day moving average. Not only did we take it out, we did it with HUGE volume. A great day. I do wish I had those longs back from Friday though, mistake on my part on that one, but I really thought we would just test the top of the range for another trip down. All you can do is play according to your plan, mistakes are always going to happen, move on and make it up with this uptrend!
Outlook for Thursday: The only option here is to jump on board and ride the wave. Shorting is out the window, don’t even think about trying it. The trade is long on pullbacks, play the game that everyone else is playing in the other sectors: BTFD.
The only concern is that we move back down and retest the 50 day moving average just under 31, but that would be healthy. It just makes it a little difficult to play long knowing that retest might happen. Hopefully, we can get it to happen soon and then make a run toward the top of the range at 33-33.50.
Trading Plan for Thursday: I will be looking for any pullback to buy a low volume retest OR a failed range break to the downside. Those are my two standard setups. It will be nice to finally get to do some trading in an uptrend instead of the no volume chop we have experienced of the last couple months. I will do my best to post my entries on Twitter, but sometimes I forget. One day soon, I hope to detail each one of these setups in a post of their own.
The first setup, a low volume test, is merely a move down on heavy volume that climaxes in a low, which forms a bounce called an “automatic rally” and then moves back down to test the high volume climax low. I want to see the climax low hold AND I want the test to be on much lower volume than the climax low. The setup is similar to a “higher low” type setup, however the lows can be equal but the one requirement is that the secondary test be on low volume. Once I’m in on that setup, I’m looking for the market to evolve into an ABCD type pattern, which is basically a bowl shaped base with a breakout of the previous highs.
My second setup is a range break. Basically, price pulls back and forms a range, a sort of box like structure where price moves sideways. At some point, price will break out of the low of the box only to get quickly rejected back into the box and out the upper boundary. The range break to the downside amounts to a stop hunt and an auction rejection. It is where the buyers show their hand and I know I’m protected on the downside. Again, after I’m in on this setup I’m hoping for the market to form a bowl shaped base and break toward the previous highs.
As long as we have an uptrend, those are my go to moves to buy dips. The only other tools I use are volume and VWAP. If I can combine VWAP with either of those two setups and have a confirming volume signature, it is usually going to be a good day.