Hi everyone,
The market has been chopping in the same range since the mid-August highs, only a couple of percent off the record and unable to break out. It wants to, but a bond market with the 10-year above 5%, driven in part by oil and the unresolved Iran conflict, is capping multiples, and the midterms in a month add another layer of uncertainty. Markets dislike uncertainty and usually demand a higher risk premium until it clears. That is why midterm years are often messy into early fall. The historical bid shows up after the vote: since 1938 the S&P 500 has been higher about 95% of the time in the following 12 months, averaging roughly 14%, and the November-through-June window has been positive in every cycle since 1942. Past performance is not a forecast, especially with yields and oil still in the driver’s seat. But it’s good to keep in mind.
Trade Ideas
The TMAD app has an insane number of functions. One of them shows gaps and what is moving pre-market. Let’s look at it. It’s Sunday afternoon, so the numbers aren’t relevant right now, but try it Monday before the market opens.
Click Scanner, then sort by CHG% (just click the column header). That shows the highest movers; click again for the lowest. This is useful for gap traders. You can trade the gap fill or the gap-and-go. Or simply see what’s moving for potential traders, or options selling for premium (big gaps up we can sell covered calls, big gaps down, we can sell puts).
If you don’t want to see every name, click Filter and choose the kinds of names you want — stocks, ETFs, or both.
You can narrow the list by size, trend, valuation, sector, and risk (low or high beta).
We also have the Top 10, which updates daily. We are testing a new strategy and use this list for manual trading.
It shows the names with the highest momentum, unusual flow, and the other criteria we use for our highest-probability trades. You still need technical analysis for the entry. We usually pick the best technical setups, structure the trades, and send them here in the update.
So let’s begin with the top trades for upcoming week.
