🐺The S&P is down historically in the red...

Hey there! My name is Jordan and I write about trading for the WOLF Financial newsletter. If you are looking for more trading tips and tricks I guarantee you’ll enjoy my content on 𝕏, @AceTheKidTA. Thanks for reading!

This service is for general informational and educational purposes only and is not intended to constitute legal, tax, accounting, or investment advice. These are my opinions and observations only. I am not a financial advisor.

The downside has continued for the S&P 500 with $SPY down 2.12% this week.

I haven’t played too many puts recently and have been looking for dips to buy up.

Why am I doing this?

Simple.

The weekly 21 EMA. (Blue line)

You can see since October of last year, $SPY has held this weekly 21 EMA and it is testing it again.

This is why I have to be thinking more towards the bullish side of things.

If we break this then I will have to adapt to the market conditions and reevaluate my thesis.

Until then I will be positioning myself long.

How To Use The 21 EMA?

I keep it very simple.

I identify stocks that are in a strong uptrend that are pulling back to their daily or weekly 21 EMAs and long off of that area.

I will usually draw Fibonacci Retracement levels as well and try to identify areas of liquidity that match up close to the 21 EMA giving me multiple points of confirmation.

You can do this with stocks that are relatively weak in a downtrend as well, just in reverse.

This is a trade I took on $NFLX.

$NFLX had relative strength that whole week and was pulling back to its daily 21 EMA.

I positioned myself in call options a little over a month out and was able to capitalize on the upside movement over the next 2 weeks.

As long as $NFLX was holding this 21 EMA I was going to stay long.

A reminder that this will only really work on stocks that are in a very strong trend to the upside or downside.

You don’t want to be trying this on stocks that are in big daily or weekly consolidation.

And there will come a time when this might not work so well given the potential changes in market conditions.

This means you need to always be adaptable as a trader and be able to switch things up when needed.

I hope this helped you guys get a deeper understanding of how I’m approaching this market!

Thanks for reading.

-Jordan

@AceTheKidTA