Weekly Update: Let the Strategy Lead the Way
Trading is all about longevity.
It’s about making sure you are slowly but steadily growing your account size over the long term.
And the way to do that is to win more trades than you lose.
I know that is easier said than done…
But with a consistent strategy for entering and exiting trades, the odds of winning more than you lose increase dramatically…
Join Us Tomorrow
Before we get to all the details, I want to personally invite you to view a special LIVE presentation with my colleague and expert stock trader Ross Givens.
Ross’s premium Alpha Stocks research service focuses on only the very best stock trading opportunities — both on the long side as stocks rise and on the short side when markets are crashing.
He recently recorded a 21.6% gain on the downside in only eight days as Pegasystems Inc. (PEGA) stock plunged…
As well as a gain of 21.3% in just 15 days in Permian Basin Royalty Trust (PBT) as that stock broke out of its range.
And last month, Ross closed another winner in Enphase Energy, Inc. (ENPH) for a quick gain of 22.5%.
He’ll talk more about his strategy in a special live session tomorrow, which you can register for right here…
Now, let’s cover the markets we’re watching this week…
As of today, Sept. 12, we are currently looking for opportunities in the following markets:
Nasdaq 100 Futures
The NQ monthly time frame is in an up trend. The market is making higher highs and higher lows. The market has an up Fibonacci with an extension above the market at price point 17867.50 about +22,860 ticks away. The market is at a low price hitting a known level of support. If support fails, it is expected the market will fall bearish towards the next level of support price point 8646.75 about -14,163 ticks below the market. It will be a good idea to turn to the daily time frame and look for a bullish or bearish trend to give the direction.
The NQ daily time frame is in a down channel. The market hit the top of the channel and is pushing bearish towards the bottom of the channel. The market is making lower lows and lower highs. It has already hit the down Fibonacci extension and is expected to pull back. It will be a good idea to wait for the market to form a high price below the top of the channel before looking for selling ideas towards the bottom of the channel.
The NQ one hour time frame is in a down channel. The market is near the bottom of the channel. It will be a good idea to wait for the market to come near the top of the channel before looking for selling ideas.
- Entry: Counter trend line break bearish near the top of the channel.
- Stop: In the buy zone above the entry.
- Limit: 11145.75
Once or if the market gives the one hour entry, it will be a good idea to turn to the five minute time frame and to look for Tunnel Trader short ideas towards the limit price.
Russell 2000 Futures
The RTY monthly time frame is at a low price hitting a known level of U-turn. If support holds, we will expect the market to create a bullish trend off the smaller time frames. If the market pushes below support, we will expect a multi month bearish push. It will be a good idea to turn to the daily time frame and to look for either A) a bullish trend above the monthly support or B) a bearish trend below the monthly support. This will give a strong idea for what the direction is.
The RTY daily time frame is in an up channel. The market is near the bottom of the channel. If support holds. It is expected the market to push bullish towards the top of the channel price point 2076.3 about +2,840 ticks above the market. It will be a good idea to turn to the one hour time frame and to look for low prices in the buy zone.
The RTY one hour time frame is near the bottom of the daily up channel. It will be a good idea to wait for the market to enter into the buy zone before looking for long ideas.
- Entry: Counter trend line break bullish in the buy zone above the bottom of the daily channel.
- Stop: In the sell zone below the entry.
- Limit: 2076.3 (We can update the limit to something closer when / if a bullish trend forms)
Once or if the market enters into the buy zone, and as long as the market stays in the buy zone, it will be a good idea to turn to the five minute time frame and look to Tunnel Trader long ideas towards the price target.
Crude Oil Futures
The CL monthly time frame is in an up trend. The market has an up Fibonacci with an extension price point 190.36 about +10,235 ticks above the market. The market has a very shallow retracement. I am expecting the market to push bullish towards all time highs price point 147.27 about +5,808 ticks above the market. Then will look to see if resistance is found near the 1.18 / 1.27 Fibonacci extension. It will be a good idea to turn to the daily time frame and look for low prices in the buy zone.
The CL daily time frame is in an up trend. The market is at a low price hitting the up trend line. It will be a good idea to turn to the one hour time frame and to look for low prices in the buy zone for buying ideas.
The CL one hour time frame is in a large sideways movement. The market is near the bottom of the range and showing signs it could push bullish towards the top of the range.
- Entry: Counter trend line break bullish above the bottom of the consolidation range.
- Stop: In the sell zone below the entry.
- Limit: 99.02
Once or if the market gives the one hour entry, and as long as the market stays in the buy zone, it will be a good idea to turn to the five minute time frame and to look for Tunnel Trader long ideas towards the price target.
We are currently out of the following markets and waiting for entry opportunities:
S&P 500 Futures
The ES monthly time frame broke a major level of support and entered into the sell zone. After entering into the sell zone, the market pushed bullish right back into the buy zone. This is a sign of sideways movement or the sellers and the buyers fighting for control. It will be a good idea to turn to the daily time frame and to look for a trend. Either bullish or bearish to help decide who is in control.
The ES daily time frame is in a down trend. The market hit the down trend line and pushed bearish. The market is hitting small level of support which could push the market back up towards the down trend line.
It will be a good idea to let the market break and close below the daily support price point 3871.50 before turning to the one hour time frame and looking for selling ideas towards the next level of support price point 3749.75 about -681 ticks below the market.
BTC Futures
The BTC monthly time frame is in a long term bullish trend. The market is moving from a high price towards a future low price. The market has a down gartley Fibonacci extension price point 10300 which is near the up trend line. If the market hits the down gartley Fibonacci extension. It is expected a bullish U-turn towards 76555 which is the monthly up Fibonacci extension. It will be a good idea to turn to the daily time frame and to wait for the market to break the down daily trend line before looking for long ideas.
The BTC daily time frame is in a down trend. The market is making lower lows and lower highs. There is a down Fibonacci extension below the market price point 11060 about -2,134 ticks below the market.
I am out of the market waiting for the market to hit the down Fibonacci extension then will look for the bullish reversal towards the monthly Fibonacci extension.
Performance Spotlight
As I always say, our goal is to maximize our odds of success.
And the best way to do that is to have a strategy to trade the markets and be consistent with it.
For example, we recently saw the Nasdaq 100 (NQ) futures market hit a one hour down Fibonacci level at 11,928.50.
That’s the horizontal blue line on the chart below…
And when that happened, we were looking for the market to make a retracement to the upside before looking for selling ideas again.
In other words, we were looking for the market to move to a higher price that would give us a better bearish entry point on a counter trend line break.
As regular readers know, part of our strategy is using a break of a counter trend line (ascending orange line in the chart above) to enter a trade.
Well, one of those things happened last week, and the other didn’t…
Stay Consistent
Zooming in on the one hour chart, you can see that the market did indeed move to a higher price last week, which checked one of the boxes for our entry.
However, the market never broke the counter trend line bearish, so no entry was triggered.
Now, the reason we have these criteria is because our research shows that buying counter trend line breaks at low prices and selling counter trend line breaks at high prices leads to more wins than losses over time.
This is a repeatable strategy, and we know from the research that it should be profitable over time.
But if a trader decided to simply sell the market at the top of the one hour channel last week, without waiting for a counter trend line break, they would have been stopped out on Friday for a loss.
There was no confirmation of a bearish U-turn, so it was really anyone’s guess whether the market would turn lower or just keep going.
And if you’re just guessing, there’s no way to forecast how you will perform over the long term.
So, if you want your trading account to stand the test of time, pick a strategy and be consistent with it!
Before You Go…
Are you a new member? Watch the replay of our latest live class right here on our website!
For more on all of the markets and how to best utilize our Tunnel Trader strategies, view all of our Q&A Session Recordings on this page.
Need help with our software? Sign up for an Orientation Class for Ninja Trader 8 or TradingView & TradeStation.
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For everything else, visit our main course page right here.
Keep on trading,
Josh Martinez
Editor, Tunnel Trading Course
P.S. Click here to register for Ross’s FREE, urgent broadcast right here.