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Crazy Times

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What a crazy start to the year… the Christmas Massacre is now beginning to fade away, and a wave of euphoric optimism is once again creeping in, and whilst I started the year with a cautious outlook built upon solid Technical Levels, price is always the number 1 Technical Indicator, and in the face of advancing price, we simply must look to take advantage of the rally that has presented itself and my weekend analysis is now incorporating BUY positions into the Market again, and the 1st couple of charts (check them out below) I’ve provided my clients this year are beginning to advance, which is pleasing.

Twilio (TWLO) - 15th Jan 2019

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Okta Inc (OKTA) - 18th Jan 2019

Okta 18th Jan 2019.png

As we can probably see, the market has rallied fast this year (11% to be exact) and the advancing prices have certainly offered opportunity to those that jumped in, and taken the gamble of a Market reversal from Key Support Levels… it’s been lovely for many of my clients and many of you taking the time to email me success stories, and those in the Apprentice Group who are crushing things.

I personally didn’t jump in early, but watching some of the numbers my clients are posting - they are nothing short of remarkable.

I’ve had quite a lot of questions these last couple of weeks asking me why I haven’t jumped in at the start of the Market rally, and why I’ve been cautious, and the reason is pretty simple… we just hadn’t cleared Key Resistance Levels in the Market.

Why take the gamble?…I cannot be critical of an approach that served me well from October - December, when 95% of the Market participants were losing their minds (and are likely still licking their wounds)… so it’s absolutely fine, I’m VERY comfortable with the approach I’ve taken, and I like very much how things are panning out.

How many of you would have liked to of exited positions in October, taken a few profitable short positions, and then resumed this week? I rest my case.

The big question is… when is this rally going to end? Does it still have legs, or are we going to have an epic fail, followed by utter carnage?

Well, here’s a chart that might be interesting to you

S&P 500 - SPY

SPDR S&P 500 19th Jan 2019.png

As we can see, we have moved back into the lower end of a previous Key Support level, and this is where we need to be cautious moving forward, because if we fail and drop below that level again, it’s not going to be good news, so that 2600 Level is VERY real.

There’s no doubt we’re due a pull back, but how deep that pullback goes is anyone’s guess… I take the view that trading WITH price is the way forward, and price is going up, so why not trade in that direction? At least until told otherwise.

Optimism is the way forward, with a splash of caution.

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Sam McCallumComment