Weekly Perspectives: Catching an intraday reversal

Weekly Market Outlook For October 21 -24, 2019
October 20, 2019
Weekly Market Outlook For October 28 – November 1, 2019
October 27, 2019
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Weekly Perspectives:  Catching an intraday reversal

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Hi traders,

This time of year is one of my favorites as the leaves begin to turn the most spectacular color and Halloween right around the corner.  

Fall is in the air. 

A quick announcement,  unfortunately, this month’s meetup will be postponed.

The venue we used for our past couple of meetups unexpectedly went out of business so unfortunately that leaves us without a suitable space this month.

We are exploring other locations for next month so if you know of any fitting venues that can accommodate a group of 30 for presentations let me know!


Catching an intraday reversal 

This week buyers continued to have the upper hand as all the US indices ended the week green even after some negative news flow to end the trading week.

Even though the environment feels ripe with risk (tariffs, recessionary talks, slower global growth, etc). the VXX is telling a different story as it hit yearly lows throughout the week. Whatever the headlines are telling you – volatility traders haven’t been buying it.

All of the indices are now trading slightly above but in and around the monthly and quarterly opening levels so that will continue to be an important area to watch to see if the buyers can maintain their control.

In this week’s video, I break down the mechanics of what I call an “inside bar reversal” and show the inside bar reversal trade I took on Friday that nailed the lows of the day.

Watch this week’s Weekly Outlook video to see the setups and levels we’ll be watching.  

In this week’s video, we look at the technical outlook for the VXX SPY QQQ IWM DIA EEM TSX TLT GLD SLV BTCUSD ETHUSD EEM GDS SAIL BILI ATI BABA BIDU ALRM SBUX and more for the week of Weekly Market Outlook For October 21-24, 2019.


How to avoid survivorship bias – 

The investment and trading world are littered with examples of survivorship bias.

This insidious bias is such commonplace that it even fools the most discerning.

After all, it’s easy to see and pay attention to, only successful individuals and businesses, not the failures that fall by the wayside.

This phenomenon is called survivorship bias: “the logical error of concentrating on the people or things that made it past some selection process and overlooking those that did not, typically because of their lack of visibility.” (Wikipedia).

This article from Richard Hughes Jones explains what survivorship bias is and how to avoid it.

So the next time you are inclined to trust the story of some guru who made it consider this advice from David Mcraney, from the You Are Not So Smart blog:

If you spend your life only learning from survivors, buying books about successful people and poring over the history of companies that shook the planet, your knowledge of the world will be strongly biased and enormously incomplete. As best I can tell, here is the trick: When looking for advice, you should look for what not to do, for what is missing, but don’t expect to find it among the quotes and biographical records of people whose signals rose above the noise. They may have no idea how or if they lucked up.

Weekly Perspectives: Catching an intraday reversal

by editor time to read: 2 min