Stock Jockz: Trade Update and Heat Map Update

Trade Update
In my previous post I said I was expecting a reversal on 9/7. On 9/8, SPX fell aroudn $11. But over the next couple of days, SPX rose, broke the 1104 resistance and closed today at 1121.90. Luckily, I closed out most on my position on 9/8 and closed the entire position out for around 15% profit.

As far as what's next, I think this is a fake break out and we are still due for a reversal of some significance. Reason being that we created a double top today just below 1125, another resistance level I have stressed in the past. Additionally, all my indicators are showing bearish signs. I think we might ahve an up day tomorrow before selling off for the rest of the week. However, I am waiting for a confirmation (on either side) before making any bets. I will keep you posted.

Heat Map
After many months of delay, bug fixing, errors, and frustration, the heat map is FINALLY complete in its entirety and ready to use. I have been testing this version for a week on the DOW 30 and NASDAQ 100 and have not seen any errors as yet.

Note: if you are unfamiliar with TD studies, I suggest a google search on TD setup, TD combo, and TD sequential before reading on.

This version features:
1. An accurate TD Setup Buy/Sell counts
2. Accurate TD Sequential counts (With an option to make aggresive counts)
3. Accurate TD Combo counts
4. TD Support and Resistance levels (when 0, it is N/A)
5. Count refresh on market close each day (so, unfortunately, it cannot be used for intraday trading. Perhaps the next version will include this feature).

I plan to test a trading system using this heat map by setting up a virtual account of $100,000. Every day (or as much as I can :) ) at market close, I am going to filter the table for those stocks hitting one of the following criterion:
1. 9 or more on Buy/Sell Setup
2. 12 (only because I am noticing that often price reverses at 12 rather than 13) or 13 count for sequential.
3. 12 (only because I am noticing that often price reverses at 12 rather than 13) or 13 count for combo.

I will analyze any of the stocks hitting TWO of the above criterion (within a 5 bars of each other) and see if the stock is at a Fibonacci convergence level.

If, so, I will, trade ATM options (in the direction that the study predicts) for a position size nearest to $5000, setting a stop loss of $1000 (or above Fibonacci level, whichever is less) and target of the support/resistance as stated by the heat map.

My exit strategy will be to sell 50% of my position when we reach 50% of the way to the target and move stop loss to breakeven for the rest of the position. Otherwise, sell another 30% at target and set a trailstop of 5% (on the option) for the rest of the 20%.

At any given time, I will hold no more than 5 put and 5 call positions and no more than $20,000 invested.

Be on a lookout for a weekly update of what stocks are on my watchlist that week and a summary of last week's performance. I have a strong feeling that the system will work well - if not at least I don't loose anything. Today's update is below:

No immediate trades but the following could be potential Put trade opportunities:
1. QCOM: 7 on Setup and 11 on Combo mixed with a declining oscillator right around an important Fibonacci level makes buying puts on QCOM quite attractive. However, we did recently break downward Fib. channel meaning that this could simply be a small retracement.