Hi Joe, JCP has made a lower low with not much RSI action, and the previous low breached below 20 on the RSI chart. Is this our time to buy?
The last low was a very sharp spike downwards then quick recovery, does that affect our strategy?
RE: 7/31/17 Follow along as @alexmorris and I try to save J.C.Penney (JCP) from Jeff Bozo and Amazon
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7/31/17 Follow along as @alexmorris and I try to save J.C.Penney (JCP) from Jeff Bozo and Amazon
Good observation of RSI readings on JCP. It did in fact just post a lower low on a higher RSI reading so one could "expect" a rally soon based solely on the RSI readings. That said, there are still lower lows below as targets, but because of this RSI signal I would refrain from shorting and look at teh next rally as a shorting opportunity. Let's see if it now rallies to generate a sell signal based on a higher high with a lower RSI print. RSI needs to trade to at least 80 of course. Nice work.
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=&symb=jcp&x=53&y=17&time=18&startdate=1%2F4%2F1999&enddate=2%2F18%2F2017&freq=7&compidx=aaaaa%3A0&comptemptext=&comp=none&ma=0&maval=9&uf=0&lf=1024&lf2=2&lf3=8&type=2&style=320&size=4&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=11
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There you go, a new n improved n loooower RSI reading of 80+ to work with. You wouldn't have known about the lower lows on JCP since you haven't been tracking it of course. But the open made the decision on whether to buy or not a very easy one.
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Awesome, thanks for the update man.
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Here is an important signal I want to show you that was generated on JCP today. This time via the DMI indicator, the indicator with the blue, red, and black line. This is a new major oversold reading that formed today which I call a "trend low" because as the ADX line is crossing 60+ the red -Dmi line is dominant over the blue +Dmi line. Whenever a trend low forms it is a "major" support/resistance area. I use these reading to determine "probable" new price targets to the downside. This is now the lowest major support/resistance area that JCP has formed since I have been tracking it and you are watching history being made as it actually happens. The previous lowest (now major resisitance) area above for JCP is the 4.51 number I already gave you, which of course is the target we waited for, AND the target that kept us out of trouble because we were "patient." JCP just blew right through it and has now "forced" me to looower my long term buy target to 2.25. That's a full 40% below the low of this new trendlow which is 3.77 (entire range is 3.89-3.77). The windup is that if you are a long term buyer you would not even consider buying JCP until it sees at least 2.25. How do you "know" it will even trade that low...when historically it has never been that low you ask? Watch me work my magic over time. :-)
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=&symb=jcp&x=49&y=12&time=18&startdate=1%2F4%2F1999&enddate=2%2F18%2F2017&freq=7&compidx=aaaaa%3A0&comptemptext=&comp=none&ma=0&maval=9&uf=0&lf=1024&lf2=2&lf3=8&type=2&style=320&size=4&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=11
You can apply this theory of trend lows to any other stock you are tracking and you will then "know" every major support/resistance area if you track them over time. They are like "magnets" for price. JCP will now have a veeery difficult time rising back above 4.51 under current market conditions.
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Wow man, I find it crazy that an indicator can tell you that a stock is going to drop 40%. It's almost unbelievable, not that I'm doubting you, you obviously have a successful system going. It did after all take a massive hit yesterday. I'm definitely paying attention to see what happens. Does this mean that you are in some sort of longish term trade against JCP? Or are you in the game for shorter term moves?
I've ordered a few books, looking forward to seeing what they've got to say about the things we've discussed. Obviously this DMI indicator is a big one to get figured out. I still don't know shit about options.
You're obviously not phased by this North Korea thing? You've got balls of steel my friend.
Thanks again for sharing. I'm taking notes, great information :)
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Me? Phased by Kim? Come Monday I "might" just put the kabash on the ENTIRE military industrial complex via a "well placed" short on Lockheed Martin. The ticker on that one is LMT...just plug it into the "enter symbol" window on your Bigchart. Go ahead Mr Trumpf..."MOAB" Kim...I dare ya! :-) I'm doing short term trades until the markets completely top out. And that won't happen until the sexy VIXens attack (and in the case of UVXY, take out) 52 week lows. Keep watchin JCP though. Let's see if the 4.50..ish area now acts as a ceiling on any rally. Here's a little penny dawg that just set the lowest trendlow I logged in and has already "almost" dropped the entire 40%. I will call the long term buy target .24 based on the trendlow (still visible on the 10 day chart) at .41. A drop of 40% less than that takes it to .24.Just another case of waiting for "the numba." Now we will find out (using the DMI readings) whether or not GALE >>> 1) Blows right thru that .26 low and generates another trendlow, which would dictate even looower prices...or 2) Trades down to the target buy near .24 (don't hate me if I miss by a few centavos) and gives us a chance for a 100%+ gain. I'll spew a blog on it "if" it actually generates a buy down assunder.
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=Stock&symb=gale&x=47&y=19&time=18&startdate=1%2F4%2F1999&enddate=2%2F18%2F2017&freq=7&compidx=aaaaa%3A0&comptemptext=&comp=none&ma=0&maval=9&uf=0&lf=1024&lf2=2&lf3=8&type=2&style=320&size=4&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=11
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Oh, as far as options go, the reason 99% of all people lose trading them is becuz they enter a call option (buy) before a price target that is lower than where they bought which still needs to get taken actually does get taken out. Until the low actually is breached it is "unlikely" that a strong rally can begin. So as the price moves down to take out the number below that needs to be taken out (while they hold their call option)... they lose $$$ as the time premium of their option deteriorates. So it is the Ty Ming of options trades that create the losses. And that can be rectumfied by making sure you do not enter your call option unless prices below that need to get taken out in fact DO get taken out. Or if entering a put option, a high price above that needs to get taken out will prove fatal to your put option if you enter it before that event actually occurs. UVXY is a good example, people "likely" getting excited about piling into the VIX and VIX derivative trades via call options right now becuz they "think" there is still a shitload of downside left in the markets. But you and I both "know" that UVXY is coming all the way back to set a new low. There is still "likely" a bit more upside in the sexy VIXens. But if you enter an out of the money call option for say Sept expiry...you may just as well flush your money down the toilet becuz the result will be exactly the same.
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8/16/17 update: OK, I'm sure you have been busy reading your new books. So that's why you missed the most rescent RSI "potential" buy signal. A lower low in price with a higher RSI reading. And now that the previous 4.51 low was breached, and a new low was set today...it is time to pay a little closer attention. yes, JCP still has a future date with sub $3 ..but teh future might not be right now. The DMI indicator is signaling a potential rally from around here. If one of those books you just received outline that...I'll buy the same book. :-)
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=&symb=jcp&x=50&y=13&time=18&startdate=1%2F4%2F1999&enddate=2%2F18%2F2017&freq=7&compidx=aaaaa%3A0&comptemptext=&comp=none&ma=0&maval=9&uf=0&lf=1024&lf2=2&lf3=8&type=2&style=320&size=4&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=11
If it rallies...you already know the "potential" uspide target. Is 20% in say a week an "OK" trade as far as you're concerned? I wouldn't even consider the trade personally. Not enuff chachingo for my personal preferences.
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Ha! Sorry boss, I'm still paying attention honestly - I have a tab open in my browser with the JCP chart all the time now. I thought we were waiting until the $2.25 mark before we were thinking of buying, my bad. You seriously need to write a book my friend, the one that arrived was a waste of time and the other one on it's way will probably be as well. Its a pretty boring topic to read straight out of a book, especially straight after work. A book on a subject like this definitely needs your edgy sense of humour :).
But yes I'm seeing the signal. And I see too that the blue line has crossed the red line which I'm guessing is a positive indicator for you. Does that descending ADX line mean that the downwards trend is ending, and the rising RSI is indicating the start of a new trend upwards? I'm probably way off. I've been trying to find out what I can about this DMI business and pretty much the consensus is "yeah, it can sometimes help to find out what the trend is...", I've found nothing about calculating target prices from it. Where did you start out and how did you figure this all out?
I'm thinking of buying the book (..) by that guy who invented DMI but I'm guessing that you and others are most likely using it differently than he was, otherwise you probably would have sent me there already.
Haha, I think you know that a 20% return in a week would be "OK" with me. Would that be a trade with margin? Thanks for the update!
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Yeah, screw the books...we are tracking it "live!" as either panic or greed takes over next. Interesting little ramp on teh open. If I was a daytrader I would have sold that move if I had bought my spew the night before...altho it was probly too late to buy when I mentioned the "potential" for JCP to run. It finished the day on an ADX buy signal ...which you don't understand just yet. But log this into your mammory banks...anytime an ADX sell or buy signal shows up on teh 10 day chart a rally immediately after that signal is "bearish" for the stock in question, JCP in this case. These ADX buy and sell signals happen pretty often. The windup is that JCP is now not a buy unless it sells off from here. What I think will happen is that the computers will "frenzy" JCP to 4.50+ before it sells off. If it does that we will see 2.25 very shortly afterwards. This shit is like a video game...cept more fun. But now you know what to look for with JCP ...a rally >>> sell. A sell off from here >>> Bullish >>> Buy! You just have to pick the "buyable" low. I have GREAT confidence in you :-)
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=&symb=jcp&x=62&y=19&time=18&startdate=1%2F4%2F1999&enddate=2%2F18%2F2017&freq=7&compidx=aaaaa%3A0&comptemptext=&comp=none&ma=0&maval=9&uf=0&lf=1024&lf2=2&lf3=8&type=2&style=320&size=4&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=11
I didn't check the options prices on JCP so I'll do that here "live!" as I'm spekkin to ye. With JCP near 3.50 the "obvious" options to check pricing on first are the $4. So for me to even consider the bet it would have to be in single digits per contract. Lets see what they are at right now.
Prices are actually pretty reasonable for a bet. In fact, if I was going to "gamble" it would be to the upside. The Sept 1 expiry $3.50 calls are at .25 market right here. That's a "fine" $150 bet. Buy 6 of those. You have 2 weeks for JCP to stay above 3.50 by at least .25 for a "breakeven" trade. Not bad...it gets you a seat at the table at least. But don't chase a gap up. Let's see what happens. If it gaps up on the open the odor doesn't get filt of course. I'm not going to trade tomorrow either unless USO dumps and I can exit my short position with a decent gain. But the JCP calls for 9/1 at 3.50 going for .25 per look like a decent lotto play here. If JCP dumps on the open you would "obviously" cancel this buy odor. Do it for me if I'm not around in the morning. :-)
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Okay. A rally immediately after a buy OR sell ADX sell signal on a 10 day chart is bearish. Storing that in my mammaries now.
Eyes peeled for JCP in the next few weeks.
Did you manage to close your USO position?
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8/22/17 update: JCP now pushing towards 3.70 but if it continue to rally it will need to be a pretty strong move or else I would exit this long trade. Right now the 3/1 expiry 3.50 calls are bid at .21...down .04 from where the trade was initiated.
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Yazzum. JCP "rapidly" approaching the price target I posted in my initial spew. You wouldn't have gotten that info from the RSI studies...and also, RSI studies are not perfect for Ty Ming your trades. Look at how UVXY rallied before putting in a lower low than the RSI 80 reading at the 52 week low of 28.20 for instance.
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=&symb=uvxy&x=43&y=25&time=3&startdate=1%2F4%2F1999&enddate=2%2F18%2F2017&freq=7&compidx=aaaaa%3A0&comptemptext=&comp=none&ma=0&maval=9&uf=0&lf=1024&lf2=2&lf3=8&type=2&style=320&size=4&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=11
The windup is that UVXY is coming aaall the way back to set a new 52 week low...which of course means the markets in general are going to attack the multi-year highs.
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8/17/17 end of day update: I didn't even watch the open but I see that JCP did open lower. Let's see what those 3.50 calls priced at today since it was the first day you could trade them after my "spec" short term buy on JCP to 4.50...ish. 9/1 expiry 3.50 calls only had one trading price today of .24 on 42 total contracts traded. I'll log that in...it could go either way but it's basically a $150 bet...and that's all you can lose...so I like the odds on this one. I'm waiting for a gold trade here now after today's festivities. DUST shares might double off the next low. Here's JCP though.
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=&symb=jcp&x=43&y=17&time=18&startdate=1%2F4%2F1999&enddate=2%2F18%2F2017&freq=7&compidx=aaaaa%3A0&comptemptext=&comp=none&ma=0&maval=9&uf=0&lf=1024&lf2=2&lf3=8&type=2&style=320&size=4&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=11
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