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Category Archives for Scott Redler

How a Head & Shoulders Top Works

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In this video, Scott Redler shares how he spotted a big head & shoulders top for the S&P 500 in 2022. Link mentioned in video: Scott’s mailing list Scott shares: How the 4 big active sequences played out on the weekly SPX chart Why the head & shoulders pattern can be trickier in real life Why he thinks the market will be range-bound and tricky in 2023 How you can put the head & shoulders to work for you

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The Inverse Head & Shoulders on the Road to SPX 4,000

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On October 17, Morgan Stanley equity strategist Mike Wilson said inflation peaked, and that the S&P 500 (SPX) could rally to 4,000. If you remember that time, the mood was super bearish. So the market was taken off-guard by Wilson’s bullishness. Now when someone smart comes out bullish, I don’t just buy – I go to the charts. Because an opinion is just an opinion until the chart confirms it. That’s why I use tools like moving averages and trend lines. So let’s break down the move. First, the SPX broke below 3568 to hit a low of 3491 on October 13. That was two trading days before Wilson’s call on October 17. Next, the SPX rallied off the 3491 low and held above the 3568 where the neckline of the inverse head & shoulders was forming. The SPX then declined for 3 days into October 21, which was a massive day because there was a powerful Red Dog Reversal long signal. The SPX also cleared the descending trendline in short order after that: Next, the SPX dipped to 3698, which held. That put in the right shoulder of the inverse head & shoulders: Then we had the big CPI report on November 10. The CPI came in cooler-than-expected, which set off a round of being. The SPX ignited through 3911, which was the high on November 1. And finally, the SPX hit a high of 4028 on November 15 when the PPI report was lower-than-expected: Remember, the biggest topic on traders’ minds was inflation, so two straight light inflation readings really put the bears back on their heels. The lesson here? Listen to smart people. But match what they say against what you see in the charts. We followed this move every day in The Redler Report, which helped us find great swing longs in names like SPY, UAL, JETS, TLT, and JPM. Not every idea works, but when you get the overall trend right, things tend to go your way. So maybe you should think about joining up! Scott Redler’s Positions Disclosure as of 2022-11-16 at 2.08.35 PM

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The Power of Monthly Charts in Technical Analysis

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In my technical analysis and moving averages lessons, I typically show daily charts. But sometimes it pays to pull back and look at longer time frames, like the monthly. This is especially true in a bear market, when daily charts can be full of noise without a clear trend. Let’s dissect the bust in Meta (META), which is down over 65% from its post-Pandemic highs, using a monthly chart. Positions Disclosure: Scott J. Redler is long AAPL, MBIO, PTON, QQQ, SPY, is short PTON calls, SPY calls, SPY puts Here’s the naked chart: Now let’s break the monthly chart down step-by-step. (A): It started with the $384 top set in August 2021, marked with the “A” on the chart: (B): META fell to $344 to confirm the false breakout, and to have us on our toes for more downside. (C): META then lost the 8 and 21 month moving averages as the stock blew threw support and free-falled. Remember, each bar on this chart represents a month, so traders had plenty of chances to just book the loss and avoid more damage on the way down. (D): Next, META broke below a bear flag $190, giving us yet another sell signal. (E): Meta breaks through $154 support to approach key levels at $123 and $113.55. The lesson here is simple: watch longer time frames, especially during a bear market. Sometimes, they can clarify things in a way daily charts can’t.

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Moving Averages for Stocks Explained: The Ultimate Guide to Trend Analysis for 2023

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Moving averages are one of the most important technical analysis tools I use. They help me figure out:How aggressive I want to beMy mix of day and swing tradesWhich stocks and sectors I want to be long or shortJust how strong the current market trend isWhat news matters, and what doesn’tI rate moving averages above news, economic data, earnings, and just about any indicator you can think of.If I was a starting trader looking to build my net worth, moving averages would be my #1 focus.And through a series of new case studies, you will learn:What a moving average isHow moving averages are calculatedThe specific moving averages I use, and how I use them to detect strength and weaknessThe biggest myth of moving averages Editor’s Notes: If you want even more moving average case studies, please check out The Ultimate Guide to Moving Averages. Positions Disclosure: at the time of writing, Scott was long MBIO, SPY puts; was short SPY calls, SPY puts What Is a Moving Average? And How Are They CalculatedLet’s talk about how moving averages are calculated.A moving average is a stock’s average price over a specific time period.A daily moving average is the average of a stock’s daily closing prices over a specified number of days.(a weekly moving average would be the average of a stock’s weekly closing prices over a specified number of weeks)We’ll focus on the daily time frame in this guide. For example, the 50 day moving average is a stock’s average closing price for the last 50 days.Every day, the newest closing price in the moving average replaces the oldest, which is why we call it ‘moving’ — a moving average change every day.Here’s a simple chart of Apple (AAPL) with its 50 day moving average. The Biggest Myth About Moving AveragesPeople often say “moving averages don’t work” or “everyone sees the same moving averages, so they have no value”But here’s the reality: most serious technical analysts understand that a moving average is not the same as a trading strategy or even a signal. I don’t buy and sell purely because of a moving average.But moving averages do help me understand the trend which contributes to my overall decision-making process.That’s why they’re so valuable to me.Simple vs. Exponential Moving AveragesThere are 2 types of moving averages — simple and exponential. They are calculated in slightly different ways. A simple moving average is exactly what it sounds like — a simple average of the stock price. (the closing stock price, specifically) An exponential moving average gives extra weight to recent prices, so it does a better job of measuring the near-term trend. Here’s Advanced Micro Devices (AMD) with its 50 day simple (blue) and exponential (pink) moving averages.They’re pretty close, but the exponential (pink) is closer to the current price.The Moving Averages I UseTechnicians and traders have tended to focus on the 10, 20, 50, and 200 day simple moving averages, which you can think of as follows:10 day simple moving average: very short-term trend20 day simple moving average: short-term trend50 day simple moving average: intermediate trend200 day simple moving average: long-term trendI use a slightly different set of moving averages in my own trading, and in Redler All-Access:8 day exponential moving average: very short-term trend21 day exponential moving average: short term trend50 day exponential moving average: intermediate trend200 exponential moving average: long-term trend(I matched the colors here on the charts below.)I use exponential moving averages because they are more sensitive to the recent action, which gives me a better read on the near-term trend.Going forward in this article, all moving averages are exponential.Is There a Difference Between an 8 and 10 Day Moving Average?You may be asking “why the 8 day moving average? Why not the 10 day?”Most of the time, they’ll be very close together, as shown in this Amazon (AMZN) chart:But here’s what most people miss about moving averages: It’s not the exact moving averages you use that counts.It’s how well you use those moving averages to find opportunities, avoid trouble, and manage risk. I pay most attention to the 8 and 21 day exponential moving averages. I stick with those because my brain is trained to judge the action based on those time frames.If I was using, say, the 10 and 20 day simple moving averages, I’d probably end up with the same results — I’d just get there in a slightly different way.The Power of the 8 & 21 Day Exponential Moving AveragesTraders often ask me why I talk about the 8 & 21 day exponential moving averages so much. Whether you see me on Fox Business, CNBC, Twitter, or the Virtual Trading Floor®, odds are you’ll hear me me talking about them.Stocks that are in uptrends find support at the 8/21/50day. Stocks in downtrends get rejected at them on Bounces. Below the 200day is real selling. Rules to live by— Scott Redler (@RedDogT3) November 14, 2018 It’s because these moving averages are the most accurate short-term road map I’ve found.And I value moving average more than any other analysis I see out there.8 & 21 Day Moving Average Case Study I: The Energy SectorFrom the 2020 pandemic low to the time I’m writing this (October 2022), the energy sector dominated the market.Here is a chart of the VanEck Oil Services ETF (OIH) from December 2021 to March 2022 with the 8 and 21 day exponential moving averages.As you can see, the moving averages are sloping up. What were they telling us?They were telling us the trend was strong. As you can see, OIH just trended up along the moving averages, with occasional breaks that were quickly reclaimed.  This is a classic powerful uptrend. Even if you’re not long a stock or ETF like this, resist the urge to short. Remember, the trend can go a lot further than may seem reasonable. In this case, OIH was rising because the Ukraine war spiked energy prices. If something goes from $200 to $300+ while staying above the 8 & 21 day moving averages, don’t bet against it going higher. So I never, ever short stocks or ETFs that show momentum above the

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Markets in Turmoil? 12 Charts You Need to See

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Thanks to the Omicrom COVID-19 variant, the bull market got stopped in its tracks, and the S&P 500 Index is now 4.3% off the highs. 4.3%. That’s a mere drop in the bucket after such a a big move for stocks in 2021, right? But… a look below the surface of a major index like the S&P 500 shows that markets are in far worse shape than you might think. In fact… we can credibly say we have “markets in turmoil!” Because if you’ve been in the wrong stocks or cryptos, you’re down a heck of a lot more than 4.3%. That means risk management and stock selection are key right now. So let’s go through the charts you need to see.The Apple EffectAs the #1 weighting in the S&P 500 — and by virtue of its ability to impact other stocks — Apple (AAPL) is essentially holding up the stock market.The S&P 500 is helpful for judging the performance of large cap stocks, but it can never tell the whole picture of the market.Just 10 stocks account for 30% of the movement of the S&P 500. And they’re mostly big cap tech stocks… with Apple at #1. Apple is a consistent fan favorite in our sentiment polls and has been remarkably strong, even in the face of a rumored iPhone production cut.VIX Approaching January Highs The VIX is known as the market’s fear gauge, and just hit levels not seen since January. What does this mean in plain English? Well, the VIX uses prices of various S&P 500 options to measure traders’ expectations of volatility. So traders expect rocky times ahead. Will they be right? We’ll see. Helpful Link: Our Primer on the VIXSmall Caps Spanked! You just saw that big caps are holding up fairly well.  But what about small caps? Well… it ain’t pretty:IWM is 12% off the highs for some major relative weakness as countless small stocks are 20%+ off the highs. Now let’s dig into one of the more speculative areas of the market… crypto currencies.Bitcoin & DogeCoin Are Crashing Bitcoin is getting SMASHED, and as of Saturday morning, it’s 32% off the November 9 high. Interestingly, that high came right around a few interesting news events.  In early November, New York City Mayor Eric Adams said he wanted his first three paychecks t be paid in Bitcoin. And on November 17, we learned that Crypto.com paid a whopping $700 million for naming rights to the Los Angeles Lakers’ Staples Center. Of course, this came amid an alt coin craze led by Dogecoin, which itself is diving:Did they top tick the crypto currency market? We’ll see. But needless to say, the downturn in the crypto currency market is emblematic of a risk-off environment. So as you might guess..Meme Stocks Get DESTROYED AMC Theaters (AMC), the King of meme stocks, is now 37% off its highs. Other names in the meme stock universe like GameStop (GME), Camber Energy (CEI), and Vinco Ventures (BBIG) posted big declines. Again – another sign that speculative money is coming out of the market.Travel Stocks Take BIG Hits As you might expect with increased COVID-19 fears, travel stocks are down big. The US Global Jets ETF (JETS), which tracks airline stocks, is down 20% in the past month: The cruise liners like Carnival Cruise Line (CCL) are in even worse shape. Now let’s talk about… salads?The Stench of Sweetgreen Salad chain Sweetgreen (SG) looked like one of the hottest IPOs of 2021. On November 18, its IPO priced at $28 a share. The stock then opened at $52 and immediately hit a high of $56.20 for a 101% first day gain. Now? Sweetgreen closed at $24.82 Friday, 56% off the highs: Talk about your pop and drops…Energy Is Surprisingly Resilient Oil prices are well off the highs, but the energy sector hasn’t been all that bad. XLE is only 5.6% off its highs, even with crude oil down 20% from the October peak.Fun fact: XLE is the #1 performing major ETF in 2021, up 45.5% year-to-date.Need Help in the Market? Pick up Scott Redler’s FREE eBook and learn how he manages risk in his real money trading:

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How I Use Relative Strength in Day Trading

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In this video, you’ll learn: How Scott Redler spots an opportunity to get long #stocks on a down day How to use #QQQ to detect a market rebound Why he uses a tier system to manage trades intraday Technical analysis tips for spotting market bounces and predicting market moves

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How to Trade SPAC Stocks

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Trading SPAC stocks is not easy. T3 Live’s Scott Redler discusses leading SPAC names like NKLA, IPOB, and IPOC so you can understand: -Why the SPAC stocks blew up -Why NKLA made Scott more cautious on the others -How he went into FOMO mode and took a trading loss -Signals that told us the SPACs were going down -How simple trend analysis and moving average techniques could have helped you avoid the carnage Scott’s Current Positions:

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Scott Redler: How I Day Traded Apple (AAPL)

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T3 Live’s Scott Redler discusses how he day traded Apple (AAPL), including: -Why he flipped back and forth from short Apple to long -Big picture technical analysis that informed his day trading -Why he likes when Apple leads the market -How he uses a Tier System to manage a stock like Apple -How he combined concepts like Red Dog Reversals with moving averages and trend analysis   Scott’s Current Positions: 

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Scott Redler: How I Traded Apple (AAPL)

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In this video, Scott Redler discusses: What signaled Apple’s downturn off the highs How he mixes day and swing trading tactics on a stock like Apple (AAPL) How he spotted a reversal in the stock What made him think Apple would pop How he manages risk in ongoing active trades As of 9/21/2020 at 5:08 p.m ET, Scott Redler held the following positions: Long: AAPL, CMLFU, DKNG, FB, IPOB, IPOC, KCAC, LCA, MBIO, SOAC, SPAQ, AAL 9/25 $14 calls, NIO 10/16 $21 calls, NIO 11/20 $30 calls, SNAP 9/24 $24.50 calls, SNAP 10/16 $27 calls, SONO 10/16 $15 calls, TSLA 10/30 $500 calls, VXX 10/16 $40 calls, VXX 11/20 $30 alls Short: SPY, NIO 10/16 $25 calls, TSLA 10/30 $600 calls, VXX 10/16 $50 calls, VXX 11/20 $34 calls

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Scott Redler: Trading Tips With Peloton (PTON)

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In this video, Scott Redler discusses: How ordering a Peloton (PTON) bike got him interested in the stock Why he ordered the bike in the first place What he’s watching in Peloton stock now The technical analysis techniques he used to analyze the stock How he uses a Tier System to manage trades As of 9/14/2020 at 1:52 p.m ET, Scott Redler held the following positions: Long: BAC, CMLFU, DKNG, HCCH, IPOB, KCAC, MBIO, NIO, NKLA, SNAP, SPAQ, WMT, AAL 9/18 $14 calls, AAPL 9/18 $107.50 calls, JETS 9/18 $18.50 calls, SNAP 9/25 $24.50 calls, SNAP 10/16 $27 calls, VXX 10/16 $40 calls, VXX 11/20 $30 calls, WORK 9/18 $31 calls, ZI 9/18 $40 calls Short: SPY, AMZN 9/18 $2990 puts, QQQ 9/18 $279 calls, QQQ 9/18 $280 calls, QQQ 9/18 $281 calls, SPY 9/18 $338 calls, SPY 9/18 $339 calls, VXX 10/16 $50 calls, 11/20 $34 calls, WORK 9/18 $34 calls

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