A Look Under the Hood
Monday, 9 March 2020
By Murray Dawes
Editor’s note: Bernd Struben here. Port Phillip Publishing’s head office in Melbourne is closed today for the Labour Day holiday. If you live in a different state you may be off for a different reason. Here in South Australia we’re celebrating Adelaide Cup Day.
Whatever the reason, enjoy the day. I’ll be back with you tomorrow.
Today’s instalment comes in the form of a video from trading veteran Murray Dawes.
Murray is the editor of our premium trading service, Pivot Trader. Murray uses his proprietary ‘slingshot method’ to hunt down rapid-fire profits from stocks while minimising risk. And in today’s markets, minimising risk is what it’s all about.
In the lead up to the coronavirus market jitters, he’s also made some remarkably accurate calls on the market lows. And on when to be in or out of the market. He didn’t hesitate to recommend his subscribers take part profits on some trades showing big gains.
So without further ado, it’s over to Murray…
Due to the public holiday today, I had to shoot the video last Thursday. That’s a lifetime in the current market environment.
So please forgive the analysis being a few days out of date.
I thought it would be useful for you to get a behind the scenes look at what I have been sending out to members of Alpha Wave Trader during this incredibly volatile period. It will give you a good sense of how I use my model of price action to map out support and resistance zones above and below the market.
If I said to you that I picked the exact low of the whole move within a few points, two days before it got there, would you snort and say, ‘yeah, right mate’.
If that’s your reaction, just click on the video above to watch the simple process I followed to map out where I thought prices should find buying support and see the email sent to subscribers giving them the level days before the low was hit.
Of course, I’m not suggesting I get it right every time, but even during incredibly volatile periods like we are seeing now, the market still respects the key zones. It’s as if the market is in fast forward and is taking only days to do what it would usually do in a few weeks or a month.
Last week I gave you a zone where I thought the e-mini S&P 500 futures could rally to of 3,120–3,260. As of Thursday afternoon, when I am writing this, that target area has been reached but there is a lot of selling pressure near the bottom of that area.
If the market does turn back down from this zone and we see the recent lows breached it could be on for young and old.
I’m hopeful that prices will continue to grind higher and hit around 3,250. If that occurs, I will be pretty keen to offload some risk and even consider purchasing some out of the money puts.
In the video above I describe an option strategy that I use for entering cheap straddles at explosive points.
If you are keen to learn more about the way I analyse price action and search for trading opportunities, stay tuned for an opportunity to join a workshop I’ll be doing in the near future.
Editor, Pivot Trader