Of course, trading these signals depends on how the general market is acting.
The first trade was a short TSLA early in the day, a short that I increased later on, adding 1/2 a position. It is the Supply Figure below that is my guide for this trade: as the price continues down, more sellers will appear. However, if we have a strong enough bounce, then the supply indicator could be back in the "under 10%" zone, which means that short trades could be come more difficult.
I would cover my shorts if the price bounces above the Lower Boundary.
You can compare this action to the AAPL activity: when AAPL broke below its 10% supply level, funds were forced to start limiting risk and sell their position. This is the reason why AAPL has a hard time regaining ground: any bounce attracts more sellers for risk management issues.
Statistically, this is what will happen with TSLA, because TSLA belongs to many fund manager's portfolio. Fund managers need to manage their risk, especially in a weak market.
Let's now review the VWM trade that failed yesterday and the reasoning behind it.
VMW offered good stats (using the Breakout Calculator) for a long oversold trade.
You can see below that the Supply level indicated that VMW was in the stable Supply zone.
When I saw that buyers were coming in, decided to buy 1/2 a long position, with the objective of buying the second half when we broke above the 200MA.
What happened next is that later in the day, some new large sellers appeared, which pushed the price down and since we would definitively close below the 200MA, it was safer to close the trade at a small loss (1.06% loss on 1/2 a position resulted in a 0.106% loss to the portfolio. No big deal!)
I also took a long XME position when it was obvious that money was moving back in materials.
Finally, I took 1/2 a short SCO position when a negative divergence started forming.
I also sold the left over NTI position. NTI is still a great company, but I plan to buy it later, after we are ex dividends (After Aug 17)
The portfolio is now 30% short and 30% long, but this is a fake equilibrium as the long trades are in the commodities while the short is only TSLA.
Before going into the trade ideas for today, I want to show the Supply pattern for PAA.
You can see below that the price fell back so hard that it is now close to its 10% stable zone when most shareholders are "locked-in". This is the place to buy if the EV pattern is positive.
The Breakout Calculator is useless for PAA, because for the past five years, we do not have suhc a strong selling move. Hence, nothing to compare to.
FSLR
FSLR had a strong breakout two days ago. Too high and extended to buy, but the supply indicator shows that a pull-back in the $49 area should offer a good entry price.
However, the Breakout Calculator indicated two days ago that the highest buy price for a breakout was $47.3. Thi narrows down our entry target between 47.3 and 49
However, the Breakout Calculator shows that a $47.3 entry has a cool 0% probability to occur today, and entry that are higher have a lower R/R ratio.
AL
AL is now close to its 50MA and is attracting good money.
If we breakout, then the stock will move back into its stable supply zone.
CAR
CAR (Avis car rental) was a short a few weeks ago, but seems to be bouncing here.
The Figure tells us that we are still in a downtrend, but I believe that if we clear $45 on strong volume, then the stock will fall back in its stable supply zone and will go higher.