What You Need to Know

Hey…it’s Jay Simon, and here’s what you need to know about the markets today.

We have news events at 9:45 a.m. EST (Flash Manufacturing) and 10:00 a.m. (New Home Sales) that can potentially have an impact on the market, so be mindful in early morning trading.

Earnings season is upon us and the market has been cautious ahead of key earnings. Yesterday GOOG and TSLA both fell short of expectations, and the charts along with other stocks are reflecting it in premarket.

Trade of the Day: 2 Ways

My top watch premarket is once again NVDA. Yesterday, NVDA traded in small range, but I caught the nice opening move for a good gain. Today, NVDA is down big premarket. It fell along with GOOG, although the earnings release seemed to have some positive new regarding the amount of money being invested towards NVDA.

For Calls:

To buy Calls we will need to see a total reversal of the current bearish sentiment with price moving and holding above VWAP. Be patient if you consider buying calls today.

Resistance levels:

• VWAP

• 119.83 (hourly level)

• 120.36 (hourly level)

For Puts:

To buy Puts we will want to see price staying below VWAP and then pushing through the support levels. Only buy on pullbacks.

Support levels:

• 119.32 (hourly chart)

• 118.75 (hourly chart)

• 118.00 (weekly chart)

Profit Pointers

Every email I try to impart one market insight that will help you develop into a better trader. Here is today’s golden nugget…

Yesterday I was reminded of the importance of having no expectations after entering a trade. I started the day off with a big gainer on the opening move by NVDA.

I then bought calls again on the first dip opportunity.

I watched as price struggled to move up. My contracts were sluggish and buyers were reluctant. These are clues that cannot be ignored. I was originally “expecting” NVDA to push through initial resistance when I got back in, but that did not happen.

The truth was all there on the chart and easy to see, but you have to be able to read the tea leaves. You cannot expect anything to happen. Just read what is happening and respond accordingly.

Once I saw price struggling mightily at the some resistance areas I quickly began to scale out, and walked away with a small profit on my second trade of the day.

Had I been biased and not been able to let go of my original expectation, I would’ve lost on that trade.

Stay honest to what the market is telling you. You’ll learn to read the truth of the market the more you can observe it without biases.

Good luck out there today and trade smart!