Critical Swing Trader Support Test in Netflix NFLX Here

Netflix (NFLX) gives aggressive traders a chance to play a triple-support price level now.

Let’s pinpoint this confluence and plan the “departure” trade from this critical pivot:

Netflix NFLX

We’re seeing three factors overlap as probable support just beneath $ 170.00:

  • The 50% Fibonacci Retracement
  • The 50 day Exponential Moving Average (EMA)
  • and the Prior Price High from June 2017

I highlighted this event to members in our “Swing Trade Section” of our Daily Strategy.

Today, we’re seeing an initial bullish bounce along with the market.

For now, watch $ 167 and the $ 170 zone as critical support, playing the bullish departure “up away from it” with a confirmation breakout above $ 175.00.

However, the bearish ‘breakdown’ thesis triggers beneath $ 165.00 and especially $ 162.00.

Place your stops and plan your short-term trade(s) with these levels in mind.

Afraid to Trade Premium Content and Membership

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Corey Rosenbloom, CMT

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Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).”

Afraid to Blog

Critical Support Test Challenge for Goldman Sachs GS

Goldman Sachs (GS) reported positive earnings that beat expectations yesterday… yet the stock fell.

Shares now face a critical “Make or Break” support challenge at a key confluence level.

What is it and what’s the short-term trade from here?  Let’s plan it:

Goldman Sachs GS Flag Support

As a long-term trader, it still frustrates me to no end to see a stock beat earnings yet collapse lower.

That’s one reason I focus so much of my trading on technical analysis – charts make sense!

Anyway, earnings aside, the chart reveals Goldman Sachs (GS) shares to be at a critical confluence support pivot.

We’re specifically seeing the overlap of the rising 200 day SMA (red) with the lower rising “flag” trendline of a rising parallel trendline channel (yellow highlight).

Ideally shares bounce here and trade the bullish pathway toward the $ 230 level again.

However, traders should be ready to short-sell (or take stops) on a breakdown/breakout beneath this support level which could collapse shares quickly toward the $ 210 per share prior low from June.

Even if you’re not trading this stock at this juncture, it should be fun to watch what happens next for your educational reference.

Afraid to Trade Premium Content and Membership

Follow along with members of the Afraid to Trade Premium Membership for real-time updates and additional trade planning.

Corey Rosenbloom, CMT

Afraid to

Follow Corey on Twitter:

Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).”

Afraid to Blog

NVIDIA NVDA Faces Critical Support Test Now

Once high-flying stock NVIDIA (NVDA) faces a make-or-break support test or it risks entering a trend reversal and period of distribution.

Let’s plot our development and pinpoint what level is our key focal point:

NVIDIA traders experienced a big run-up in 2016 (it frequently topped our “Strong Stocks Getting Stronger” scan for members) but then stagnated in 2017.

Namely, price formed a “Double Top” price pattern just above the $ 115.00 per share level.

Negative divergences (red arrow) in Momentum and Volume also set the stage for a stall and possible reversal.

For the moment, buyers defended the $ 95.00 per share level which is a simple Price Pivot and the 38.2% Fibonacci Retracement as drawn.

If you’re trading this stock and forming a game plan, have a neutral to sideways (bullish bounce right now) plan between $ 95.00 and the $ 115.00 level.

Otherwise, develop a bearish breakdown (short-sell) plan on a departure away from $ 95.00 toward lower target levels such as $ 88.50 and $ 81.25 (or even the future gap fill near $ 70.00 per share).

Whatever happens, it should be interesting and hopefully profitable for you.

Afraid to Trade Premium Content and Membership

Follow along with members of the Afraid to Trade Premium Membership for real-time updates and additional trade planning.

Corey Rosenbloom, CMT

Afraid to

Follow Corey on Twitter:

Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).”

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Breakout Test

Good morning, everyone. Well, quite a weekend, wasn’t it? I’m glad I wasn’t traveling by plane. Are people really this surprised that Trump actually is doing what he said he was going to do? I guess the nation is too accustomed to politicians……….actual politicians………like ol’ Hillary and assume that campaign promises are merely for the […]
Slope of Hope

Invest based on PISA test results and income tax rates?

The latest PISA test results are in, comparing academic achievement among 15-year-olds in countries around the world (OECD). I’m wondering if these can be a guide for a long-term buy-and-hold investor. What motivates a business to invest? Natural resources, obviously, but, for the non-extractive part of the economy, how about educated workers plus low tax rates?

Within a country, both the academic ability of young adults and overall size of government seem to be fairly persistent over the decades.

Consider France. Like the U.S., this country is mediocre in terms of academic achievement and, according to the above-referenced OECD report, 14.8 percent of French people are “low achievers” who, especially in a $ 15/hour (15 euro?) minimum wage world, seem likely to be permanently on welfare (the French may not offer U.S.-quality subsidized or free public housing or food stamps, but they do have free health care for those without jobs and at least some traditional cash welfare). Heritage Foundation says that the French collect 45 percent of GDP in taxes (but maybe the real number is higher? The same page says “Government spending equals 57.5 percent of total domestic output” and “deficits hovering around 4 percent of GDP”).

Maybe some French companies are profit-machines today, perhaps based on brands established 50 or 100 years ago, but in the long run why would the country attract new investment? Capital could flow to PISA chart-toppers Singapore (government spending 18 percent of GDP; top income tax rate 22 percent; top corporate tax rate 17 percent), Estonia (no corporate income tax), Taiwan (government spending only 19.4 percent of GDP; top corporate tax rate 17 percent),

What do readers think? If investing with a 20- or 30-year horizon, would it make sense to look at these PISA numbers?

[A retired hedge fund manager friend says “No. All of this is already priced into the markets,” a variation of the traditional money-manager’s theory that “Your ideas are priced in; my ideas will yield above-market returns.” Generally I am a believer in the Efficient-market hypothesis, but what if markets are dominated by investors with a shorter-term horizon? Why would they be looking at the academic achievement of today’s 15-year-olds?]

Philip Greenspun’s Weblog

Why you don’t want to be a test pilot

From Skunk Works: A Personal Memoir of My Years at Lockheed (Ben Rich)…

(from an Other Voices section, written by a test pilot of the Have Blue stealth prototype) A couple of hours later I was completing a routine flight and coming in for a landing. I came in at 125 knots, but a little high. I was just about to flare and put the nose down when I immediately lost my angle of attack and the airplane plunged seven feet on one side, slamming onto the runway. I was afraid I’d skid off the runway and tear off the landing gear, so I decided to gun the engines and take off and go around again. I didn’t know that that hard landing had bent my landing gear on the right side. When I took off again, I automatically raised my landing gear and came around to land. Then I lowered the gear, and Colonel McClain, my chase, came on the horn and told me that only the left gear was down. I tried everything—all kinds of shakes, rattles, and rolls—to make the right gear come down. I had no way of knowing it was hopelessly bent. I even came in on one wheel, just kissed down on the left side, hoping that jarring effect would spring the other gear loose—a hell of a maneuver if I have to say so—but it proved useless. By then I was starting to think serious thoughts. While I was climbing to about 10,000 feet, one of my engines quit. Out of fuel. I radioed, “I’m gonna bail out of here unless anyone has any better idea.” Nobody did. I would’ve preferred to go a little higher before punching out, but I knew I had to get out of there before the other engine flamed out too, because then I had all of two seconds before we’d spin out of control. Ejecting makes a big noise—like you’re right up against a speeding train. There was flame and smoke as I got propelled out. And then everything went black. I was knocked unconscious banging my head against the chair. Colonel McClain saw me dangling lifelessly in the chute and radioed back, “Well, the fat’s in the fire now.” I was still out cold when I hit the desert floor face down. It was a windy day and I was dragged on my face by my chute about fifty feet in the sand and scrub. But the chopper was right there. The paramedic jumped out and got to me as I was turning blue. My mouth and nose were filled with sand and I was asphyxiating. Another minute or two and my wife would’ve been a widow. I was flown to a hospital. When I came to, my wife and Ben Rich were standing over my bed. Ben had flown her in from Burbank on the company jet. I had been forced to bail out four times over fifteen years of flight testing for the Skunk Works, and I never suffered a scratch. This time I had an awful headache and a throbbing pain in my leg, which was in a cast. A broken leg was not fatal in the test flight business but my pounding headache was. I had suffered a moderate concussion and that was the end of the line for me. The rules were very strict about the consequences of head injuries to professional pilots.

We were great innovators, rule benders, chance takers, and when appropriate, corner cutters. We did things like fuel airplanes inside an assembly area—a strictly forbidden act that risked fires or worse—to solve the problem of not having to move a very secret airplane into daylight to see if its fuel system leaked. Our people knew what they were doing, worked skillfully under intense pressure, and skirted hazards mostly by sheer expertise and experience. But as we grew, the skill level decreased and sloppiness suddenly became a serious problem. Midway into the stealth fighter project we began experiencing foreign object damage (FOD) caused by careless workmen. This particular problem is familiar to all manufacturers of airplanes but had been practically nonexistent in our shop. Parts left inside an engine can destroy it or cost lives in fatal crashes. We’ve all heard about surgeons leaving sponges or clamps inside bodies—but I know of a case in the main Lockheed plant where a workman left a vacuum cleaner inside the fuel tank of an Electra. The vacuum cleaner began banging around inside the fuel tank at ten thousand feet and the pilot landed safely before disaster struck.

But there was always a price to pay when too many inexperienced workers were doing vital work on an airplane. On April 20, 1982, Major Whitley’s stealth fighter was ready to take its Air Force acceptance flight out at the secret base. Whitley himself wanted to take the flight, but that was strictly against our rules. Our veteran test pilot Bob Riedenauer got the assignment. The airplane had performed perfectly during predelivery testing, but the night before the test flight we relocated a servomechanism from one equipment bay to another and rewired it. Riedenauer had barely lifted off the runway when he found to his horror that the wiring had accidentally reversed his crucial pitch and yaw controls. The airplane was only thirty feet off the deck when he flipped over backward and crashed on the side of the lake bed in a billowing cloud of dust. Bob was trapped in the cockpit and had to be cut free, sustaining serious leg injuries that kept him hospitalized seven long and painful months.

A few months after the first successful [SR-71] Blackbird test flight in April 1962, test pilot Bill Park appeared at my desk and dropped his plastic flight helmet in my lap. “Goddam it, Ben, take a look at that,” he said, pointing to a deep dent near the crown. As Bill described it, he was cruising at sixty-five thousand feet on a clear, crisp morning above New Mexico, when suddenly, with his airplane blistering at 2.7 Mach, he was deafened by a loud bang and violently flung forward in his harness, smashing his head against the cockpit glass and almost knocked unconscious. “It felt like a couple of the L.A. Rams shaking me as hard as they could,” Bill said. The problem was called an “unstart.” It occurred when air entering one of the two engines was impeded by the angle of the airplane’s pitch or yaw and in only milliseconds decreased its efficiency from 80 percent to 20 percent. The movable-spike inlet control could correct the problem in about ten seconds, but meanwhile the pilot was flung around helplessly, battered all over the cockpit. Bill Park and Lou Schalk and several of our other pilots were experiencing these awful “unstarts” as much as twenty times in ten minutes. The damndest part was that the pilot often couldn’t tell which engine was affected and sometimes he turned off the wrong one to get a relight and was left with no power at all. This happened to a Blackbird over West Virginia. The pilot struggled to relight both engines as the airplane plunged toward earth. Finally at thirty thousand feet, the two engines came alive with a tremendous sonic boom that shattered windows for miles and toppled a factory’s tall chimney, crushing two workers to death.

Not necessarily that much better flying completed aircraft designs…

(regarding the U-2 spy plane) But [the pilot] also had to guard against climbing too slowly, that is, below 98 knots, or the airplane would stall and fall out of the sky. Above 102 knots the airplane experienced dangerous Mach or speed buffeting. So the slowest it could safely go was right next to the fastest it could go as it climbed steeply to above sixty-five thousand feet. And the shuddering felt the same whether it was the result of going too fast or too slow, so a pilot had to keep totally alert while making corrections. A mistake might make the buffeting worse and shake the airplane to pieces. And to make life more interesting, our test pilots reported that sometimes during a turn the inside wing would be shaking in stall buffet while the outside wing was shaking even more violently in Mach buffet.

At altitude the pilot flew nose high and wings level, so for him to be able to see down we installed a cockpit device known as a drift sight—basically an upside-down periscope that had four levels of magnification and could be swiveled in a 360-degree arc. The pilots also had to plot their navigation by sextant, plotting precise routes while maintaining total radio silence and photographing particular targets with the pinpoint accuracy of a bombardier. A screwup could mean death by ground fire or fighter attack—and a guaranteed international crisis.

More: Read the book.

Philip Greenspun’s Weblog

The first test for a new trader

You get hired for June on a trading desk.

You take The Foundation, a 6 week course.  You learn everything you didn’t learn in school, the internet, blogs, cable TV (just kidding), your uncle, and/or trading gurus about the markets necessary to place professional trades.

Then it’s on to Trader Development where for the next 6 months you experiment with different trades, build a PlayBook, find your niche, build habits of best practices, attend mentoring sessions, watch trading film, share notes with fellow traders, learn to leverage technology thru filters, scanners and autotrading.  You are expected to show an edge in Read more […]
SMB Capital – Trading Education