Mid-Day Outlook – Buy XLF Calls

Mid-Day Outlook – Buy XLF Calls

XLF (Financials ETF) Daily Candles

The action so far today is quite bullish, though the tempo is plodding along. We had a gap-and-go scenario per the gap rules. We have nearly 9 to 1 and 4 to 1 advancers versus decliners on the NYSE and NASDAQ, respectively. On the S&P 500, we have pegged at a net 350 advancers all morning. 

In addition to the strong internals mentioned above, tick distribution has been positive, along with cumulative ticks, and we see new, all-time highs at this writing.

The Founders Group just took a 10% position in the August 20th XLF 36 Calls. The chart is very constructive. Our initial stop will be a close below today’s low at 36.09. This is a swing trade, and we plan to hold the position for more than a day trade. For how long? We cannot say for sure, but we should ride the position to a new all-time high above 38.60.

Don’t go for broke. You can scale in. A close above the 21 EMA would justify adding to the position.

The next update will come over the weekend. Enjoy yours!

A.F. Thornton

AF Thornton

Website: https://tradingarchimedes.com

A.F. "Arthur" Thornton is an expert in logic, risk/reward quantification, market fractals, pattern recognition and asset class behavioral analysis with 34 years devoted to developing algorithmic and quantitative trading systems. In addition to trading his own capital, Mr. Thornton designs custom algorithmic and quantitative trading systems for a small and exclusive group of exceptionally qualified traders.

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