In tonight’s update, we’ll focus on opportunities for day trading volatility in the Nasdaq, Russell, Gold and Crude Oil futures.
With a volatile morning, we had the S&P and DOW warn us that they were experiencing more volatility than their Nasdaq counterpart.
Using that free information, we focused on day trading the volatility in the Nasdaq (/NQ futures) more aggressively. Conversely, we used our conservative models for the Russell 2000 (/RTY futures) which was more volatile.
Our last trade that we discuss in the video is in Goldman Sachs (GS stock), which was an opportunity to fade price action against a Volatility Box edge.
XLF has been a theme of ours this week, and GS stock earnings fell perfectly into that larger overall idea.
Volatility Day Trading Strategies for the Nasdaq, Russell, Gold and Crude
Our morning told a clear story about the markets today.
We had the following information for our 8 futures markets within the first 30 minutes of market open:
- S&P 500 — Conservative Volatility Box (more volatile)
- Nasdaq Futures — Aggressive Volatility Box (less volatile)
- DOW Futures — Conservative Volatility Box (more volatile)
- Russell Futures — Conservative Volatility Box (more volatile)
- Gold Futures — Aggressive Volatility Box (less volatile)
- Crude Oil Futures — Aggressive Volatility Box (less volatile)
In the case of Crude Oil, we were playing the post-event volatility of the Crude Oil Inventories Report.
The Volatility Box perfectly caught the sell-off in Crude Oil, giving us a phenomenal opportunity to buy the dip, and look for a sharp move higher.
Similarly, we had an opportunity to also catch the wick in Nasdaq, Russell and Gold. A more detailed explanation of each trade is available in tonight’s video.
Here is a P/L break-down of the futures trades from today:
- Nasdaq: +$820
- Russell: +$475
- Gold: +$800
- Crude: +$880
And for those that are wondering, yes, the microfutures and mini-crude contracts are supported by the Volatility Box.
Likely Trending List – Jan 16, 2020
Using our new Stock Volatility Box Tool, we have a few different symbols that are on our “Trend Trending” list for Thursday (January 16, 2020). Below is a sample list of just a few of those symbols.
Each of these symbols closed outside of our Volatility Box edge, and we look for them to continue to trending into tomorrow’s session, if they breach our clouds.
- Akebia Therapeutics (AKBA)
- Coty Inc. (COTY)
- Plug Power (PLUG)
- PNC Financial (PNC)
- Tesla (TSLA)
- United Health (UNH)
For all of our Volatility Box members with access to the tool, you can use the list above to create a game plan for tomorrow’s trading.
The key will be to look for price to breach above either the Aggressive or Conservative Volatility Box cloud edge in the first 15 minutes of market open.
Here is a comma-delineated list of the tickers above, that you can input directly into the Stock Volatility Box Tool:
If we breach above each of those respective levels, then we’ll be looking at those symbols as likely trending candidates for the day.
However, if we do not breach those levels within the first 15 minutes, then we skip the symbol and focus on areas where we have breached.
XLF earnings holds our attention this week. We look at them not only as trade opportunities using our Smarter Earnings and Stock Volatility Box, but also as a domino falling.
XLU has already rolled over from our last update. A transition in XLF from from acceleration to accumulation would support a pullback in the S&P. This would also help us confirm our put call ratio hypothesis.
Nothing is guaranteed though. Financials could crush earnings, and rip the market higher. This would lead the 10-day put call ratio SMA to remain below our 0.85 threshold for much longer.