Election-Fueled SPY Opportunity

Published on
October 10th, 2018
Topic
US Economy, Trading, Technical Analysis
Duration
10 minutes
Asset class
Equities

Election-Fueled SPY Opportunity

Trade Ideas ·
Featuring Dave Floyd

Published on: October 10th, 2018 • Duration: 10 minutes • Asset Class: Equities • Topic: US Economy, Trading, Technical Analysis

Does recent weakness in the S&P 500 coupled with rising interest rates and the upcoming mid-term election constitute a buy signal for the S&P 500? Dave Floyd of Aspen Trading Group sits down with Real Vision's Brian Price to walk us through his process of fundamental and technical analysis regarding the trade. Filmed October 9 in New York.

Comments

  • DF
    Dave F. | Contributor
    14 October 2018 @ 14:29
    Dust is starting to settle. Technically, Friday's push higher into the close is rather encouraging. Using 2724-45 as a floor/support/stop.....should see a bounce towards 2865
  • NI
    Nate I.
    11 October 2018 @ 14:35
    Looking up at $285 in SPY. Now about $277 as I write this. Are you out Dave or do you still think long S&P into year end?
    • DF
      Dave F. | Contributor
      11 October 2018 @ 15:36
      Too early to know, but a lot of damage was done yesterday. Likely to see a rally in the hours/days ahead....how far it goes is up for debate.
  • AG
    Arpit G.
    11 October 2018 @ 04:02
    Thanks for mentioning 2865 as a support level on the SP500! Helped out a lot today!
  • CM
    Carl M.
    11 October 2018 @ 03:28
    Dave , I appreciate, what I would call, your agnostic approach. Great tools to keep the emotions and chatter in proper perspective. I am learning...slowly.
  • DC
    Darren C.
    11 October 2018 @ 02:26
    I'd love to see an update video asap from Dave F discussing what his charts look like with the newest info from Oct 10 trading. It would be educational for us non technical traders ....
  • DR
    David R.
    11 October 2018 @ 01:40
    You can't win them all. If you win 60% you're doing great. That's why you have stops and a plan. For that, I give thumbs up. His plan wasn't bad actually IMHO. 2865 was a good pt.
  • DR
    David R.
    11 October 2018 @ 01:35
    But I tend to agree with his outlook for USD and EM, as a short term trade that's being potentially set up soon. But I hasten to add you shouldn't lump all EM together; there are dog and jewels.. So avoid the crappy EEM etf.
  • DW
    Dave W.
    10 October 2018 @ 23:25
    Not sure how Dave got chosen to be a regular contributor. I continue to hear nothing but fluff and meaningless stats to justify taking positions. Maybe I'm biased but I put no stock into a guy who uses primarily Elliott Wave for analysis and then proceeds to talk about fundamentals and sentiment to add to his narrative. To me this is pure confirmation bias. There is so much good content on RV this (and other trade ideas) just doesn't measure up.
    • DR
      David R.
      11 October 2018 @ 01:22
      This is no fault of Elliott Wave. The EW guy on Seeking Alpha TWO WEEKS ago printed that a move below 2880 would be toxic. That happened last week before the recovery again above 2900 (an opportunity to sell). Perfect. Now it's 2785. Likewise on Monday am 8:30am and 9:30 at DailyFX, two Elliot Wave analysts both said US stocks were about to puke imminently per EW pattern... and voila!
    • DF
      Dave F. | Contributor
      11 October 2018 @ 11:10
      Thanks Dave W for the comment. Confirmation bias? Not sure I would agree with your assessment. Regardless, what ends trivial debates like this is performance. Please go back and review the dozens of calls (videos) I have had here over the last 3 years.....that should bring the discussion to what's important...performance.
    • RM
      Russell M.
      12 October 2018 @ 06:56
      Seems rude. He showed up & shared how he does it. Personally I’m not interested in anybody’s trades, but I will tune in to see everybody that shares how they do it. Dave gets good marks for complete openess.
  • DF
    Dave F. | Contributor
    10 October 2018 @ 23:03
    This trade idea has been nullified in a rather rapid manner.....glad there were clear 'stop' levels.....market took a spanking today. I am holding the Call Spreads, but closed futures
  • CW
    Christine W.
    10 October 2018 @ 21:36
    So much for that call. Looks like all bets are off.
  • BC
    Bogdan C.
    10 October 2018 @ 20:19
    S&P 500 Index - 2,785.68 (-94.66; -3.29%) 10.10.18 close
  • MN
    Michael N.
    10 October 2018 @ 18:56
    Days not over yet but S&Ps at 2819 at 3pm.
  • PW
    Peter W.
    10 October 2018 @ 18:54
    Even though I didn't trade on it, something cropped up with the ES SP500 contract 8 sessions ago, and I had to significantly reduce size. It went flutter, visible book vs actual transaction liquidity was cut 22%, then 30% next session, then 35% on 4th. Now with the latest downdrafts, it obviously never recovered. Normally transaction depth (not visible book) would restack (buy-back algos restart inventory allocation 1-1.5hr after RTH open) after 2-3 sessions of time-out breathing, but for whatever reason that has not been case this correction. With the significant breakdown below 2865 (ES) today, losing the breakout from all-time back in Feb, a massive 90k volume traded in 5mins from 55's to 51 handle. Hand was shown. It's going to take some very heavy lifting to get on up through and close above 65 handle area when this downdraft subsides. I honestly don't see how you put on a meaningful long until 2818 and 2790 zones, or it shows significant strength about 2865. FWIW, I trade 0.4-0.7% of entire daily ES volume @ just above HFT timescale. - IMM/B-1 trader
    • PW
      Peter W.
      10 October 2018 @ 18:56
      Correction... "about 2865" should read "above 2865".
    • TR
      Travis R.
      10 October 2018 @ 21:37
      Hey RealVision lets get Peter W. on for an ES insights segment.
    • KA
      Kristian A.
      11 October 2018 @ 00:41
      When do we get Peter W on again?
  • cr
    chris r.
    10 October 2018 @ 18:01
    Kind of silly to post this video if the stop loss was broke prior to watching.
    • GF
      Gordon F.
      10 October 2018 @ 19:44
      Chris, I have to disagree. Sure, the trade is broken, but the analysis and approach are valid and are worth studying. To paraphrase the old saw, I'm trying to learn to be a better fisherman, not just wait for an excellent fisherman to hand me a fish from time to time.
    • TR
      Travis R.
      10 October 2018 @ 21:38
      Nothing wrong with stops being hit but the timing of the video post was bad. Usually a couple day lag on RealVision posts is my observation.
    • DF
      Dave F. | Contributor
      10 October 2018 @ 23:21
      Hey everyone.....video was filmed on Tuesday....posted tody (Wed) prior to market open) - stops would have been triggered mid-day. That's pretty solid turnaround time....the RV folks work hard. Yep - the trade did not work....that's trading. The logic for the trade was valid IMO....and that is what you need to do each and every time. Have a valid thesis, proper price levels for entry/exit and size the position correctly.....over a large sample size of trades it works.
    • cr
      chris r.
      12 October 2018 @ 13:53
      You're right Gordon, I was in a bad mood by the sell-off.
  • MP
    Mirjam P.
    10 October 2018 @ 13:35
    Hi Dave, a couple of questions regarding the stats when the S&P500 returns to the 50DMA while in a strong uptrend if you don‘t mind sharing: How do you technically define a strong uptrend? What is the timeframe the gains of on average 3%-5% are to be expected within (timeframes are mentioned later in the video but in a different context)? Shouldn't the average be a single number or is this a confidence interval?
    • DF
      Dave F. | Contributor
      10 October 2018 @ 15:50
      Hi Mirjam.....the time frame by and large is out to the end of the year. Some of the quant data points to 6-month holding period. But on average the various quant data points suggest viewing this via a 3-month window with gains averaging between 6-10%. Trading is not an exact science as you well know, and when you combine various inputs for the analysis there s overlap and well as a wider dispersion of outcomes. Today's price action is putting this view under heavy scrutiny however, 2865 is pretty key as noted in the interview.
    • MP
      Mirjam P.
      10 October 2018 @ 17:33
      Thanks for the reply. My questions refer exclusively to the statistics you mention about SPX revisiting the 50DMA in a strong uptrend (starting around 1:20 minute mark). I was just hoping for a bit more specific info ;)
  • cl
    connor l.
    10 October 2018 @ 11:09
    Timely and solid trade. A collective thank you to Dave Floyd and Real Vision!
    • DF
      Dave F. | Contributor
      10 October 2018 @ 11:28
      Connor....appreciate your comment. Have a good day.
    • KS
      Karen S.
      10 October 2018 @ 18:40
      lol

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