Stocks fell Tuesday morning, setting the three major indices up for a third straight session of losses. Shares of the FAANG stocks including Tesla slid the most in pre-market activity. In particular, Tesla (TSLA) shares slid by the most since March’s selloff after the company wasn’t included in the S&P 500. At 9:30 am, the Nasdaq was off 3% or more than 350 points, shortly after the opening bell. Meanwhile, I was attempting to go long as price was back in a daily demand zone.
However, since the S&P 500, DOW and Russell 2000 have more downside to get to any real demand, Nasdaq should go lower too.
MY TRADING METHODOLOGY IN A NUTSHELL BELOW
I’m a supply and demand trader. The premise of supply and demand trading is when the market makes a sharp move up or down the large institutions i.e banks/hedge funds are not able to get their entire trade placed into the market, leaving pending orders to buy or sell at the zone with the expectation the market will return to the zone and the rest of their trading position will be filled.
I use multiple time frame (MTF) analysis to improve my discretionary trading decisions. MTF analysis involves analyzing the same asset on multiple time frames. The rule of thumb when using MFT is you want your charts to scale down/up by 4X – 6X. In my case I tend to look at:
Monthly Charts (curve time frame) – which represents that jet fighter flying over the football stadium.
Weekly Charts (trend time frame) – which represents the concession stands looking down at the field.
Daily Charts (entry time frame) – which represents being on the football field with the player.
4 Hr Charts (entry time frame) – which represents the center hiking the ball to the quarterback.