In this week’s free video for swing trading options, we look at two short trade setups we took with our MTS members. The first is a trade we exited yesterday with a 60+% gain in less than a week. The second trade is one we entered in today and are looking for a big downside move over the next week.
The swing trading method we used for these trades is our proprietary method we teach with our MTS members. The good news for you is that we are launching a swing trading course later next month called the Momentum Sniper. We plan on giving a huge 50% discount to our existing email subscribers when we launch the course.
If you haven’t signed up to our list already, do it now so you can lock in your discounted rate for the Lifetime Access to the Momentum Sniper Course.
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Weekly Market Wrap Video Transcription:
Hey guys! It’s Eric. Welcome to the StockOptionAssassin.com’s free video for Swing Trading Options. I want to go over two trades, one trade that we just exiited and one that we just entered. I want to show you the setup so you’ll understand what we do here.
Joy Global Inc. ($JOY) Trade Analysis
First of all, the first I’m going to look at is JOY. We closed out of our Joy position yesterday as we got the expected move we were looking for. Let’s go through the setup real quick. This is on March 14th. This is where we took the trade. I have it circled here on this day. Basically, if we zoom out just a little bit, Joy had already been in this down trending channel. We have our Squeeze indicator. This is one of our main indicators for determining market direction. We use a Modified MACD to help us with those entry decisions.
But ultimately, Joy was moving down. Even on a weekly chart with the same indicators, you can see that clearly the momentum is to the downside. What we were looking at is we were in a Squeeze. That’s where the dots are red. Then ultimately, this was moving lower and we stayed below our moving average here. Here we’re using a 13 EMA, which is that purple line. Basically, we’re below the moving average. The Squeeze is moving lower. This is where we entered our short trade.
If we look over on our 30-minute chart, you can see this is the 30-minute chart during this yellow circle here, this oval. Basically, using the exact same indicators on a smaller timeframe, the squeeze was pushing lower as well. We entered the trade on this day. I don’t remember exactly which 30-minute candle it was, but ultimately what happened over the next couple of days was the trade went against this just a little bit. But ultimately this played out.
We got a huge move two days ago. This was Tuesday. On Tuesday we hit this lower band. This is our Keltner channel that we work with. We took profits at the Keltner channel. Our modified Keltner channel basically tells us that we are in an oversold situation, so what we did was we took half our profits off. That was about a 30% gain or so on the first half. We put a breakeven stop on the second half. Then ultimately, the next day this rolled over and we hit the bottom of this channel and we took the rest off for an 85% gain. We had a really great trade, very simple to use indicators.
Capital One Financial Corp. ($COF) Options Trade
We have another trade that we actually entered in today and I wanted to show it to you. Depending on how fast you can get this video, you might be able to take this trade. Again, same exact indicators but this time what I was looking at was a 4-hour chart and I was looking at COF.
First of all, we look at the weekly chart. This thing has rolled over. We’re getting this little relief bounce but you notice the MACD and our Squeeze are still well below zero. We came up to the mean. As it’s starting to get to the end of the week, this weekly candle is really starting to look ugly. The weekly chart is definitely looking bearish here. In the financial world, COF has not been performing as well either. On the daily chart, we’ve closed back below the mean here, the moving average. We got that MACD fade here going on. It looks like this thing wants to cross zero down there.
Really the trigger, though, is we don’t just want some rolling over. We want to enter a trade that we think can make a quick move because that’s how you make money when you swing trade options. If you’re going to be an option buyer, you’ll need that stock to make a move quickly so that theta and the other Greeks don’t work against you. That’s what we look for here.
Basically, when I was scanning through my charts last night, COF in the 4-hour chart (remember there are two bars of these per day) came back down and we have the Squeeze moving lower. The Squeeze is actually firing short. Right now on the second half of today, the Squeeze is starting to fire short and we entered this trade. Actually, we entered this earlier this morning. On the 30-minute chart, here’s what we were looking at this morning. This opened up. We entered right around here. Again, it went against a little bit but that’s okay. This thing is rolling over and now the 30-minute Squeeze we’re looking for that to fire short and that would trigger a bigger move in the 4-hour chart. We’re looking for 6 to 8 bars of this. On a target basis, we could potentially come to the lower band at this point, which is 52.5. But then ultimately, if the market really starts to sell here and we can get down to this 50 level, potentially some sort of double bottom, but if this thing really gets going, we could see high 40s here.
That’s A Wrap:
Hopefully that helps. If you have any questions, let me know. What I do want to let you know is later next month we are going to be launching our Swing Trade course that goes over these exact indicators and how to use them on multiple timeframes. We’re going to talk about how to scan for trades, all the settings for these indicators. This is what we use in our Market Timing Service, our Swing Trade Service for trade alerts. They already understand all this but we’re actually going to break this out as a separate course for those that really just want to focus and study on the course.
If you’re not already signed up for our email list, go ahead and sign up and you’ll be getting some information probably in the next three to four weeks. We’re going to be launching this probably at either the end of April or the beginning of May and we’re going to be offering a nice large 50% discount. It’s going to be a lifetime membership to the course. We will continue to add new trades and samples each month so that you can continue to learn this course over time. This is not going to be a course where you get a DVD and then it’s done and it’s never updated so hopefully you guys will appreciate that.
You guys have a great day. Have a great weekend. Happy trading!