THE MAGIC TRADING PORTFOLIO: ***THE MAGIC PORTFOLIO*** Friday July 3rd -> $MBI & $FEYE lessons, $MS $KLAC $LVS position adds, $DDD added to portfolio, $USDCAD position observations.

July 3rd Review:

What a day! Good US data came out this morning and bad Canadian data which is what I needed for my $USDCAD trade, so price rallied but then dropped back down toward demand. Thing is on a 240 chart the RSI is showing me positive divergence so I still believe we head higher. This drop was just a reaction from overhead supply. Made a huge mistake with opening a position on $MBI, chart looked great but bad news was released that iI didn't check for. NEWS STORY Opened a position on $DDD and added to $MS & $LVS positions. $FEYE was another mistake I made today, got in too early and didn't allow the full range of the daily demand zone play out.

Click here for the Week Ahead -> July 7 - 11, 2014 Market Movers

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Magic Ingredient:
If there is any one thing that has added more to my success than anything else, it is understanding how important it is to time the market with your trades. The key to my strategy is to time the markets GREEN and RED zones with the GREEN and RED zones from the setups. If they are both entering their same colored zones at around the same time then the probability of the setup working out is highest. Otherwise, market needs to be trending upwards to take entry of setups in the GREEN zones or market needs to be trending downwards to take entry of setups in the RED zones.
SHADED GREEN ZONES = Strong Buy Zones

SHADED RED ZONES = Strong Sell Zones

Markets Overview (The Big Picture):

Take note of the GREEN demand zones and RED supply zones mapped out below. These are the areas of interest for me because this is where there is a great deal of demand to fill buy orders and supply to fill sell orders from the institutions.

The Nasdaq has been eating through the 240 supply and looks to be making upwards without issue. It will face some Daily supply up ahead. The Dow hitting daily demand and heading upwards. The Russel almost hit demand and is heading upwards right into some supply but ate right through all of it. The S&P hit daily demand and is now heading upwards.

Markets Overview (30 Min Chart):--> Supply & Demand outlined below.

Currencies:

The Million Dollar Strategy:
Chart Setup --> Chart has an 89 period EMA and an 8 period EMA, RSI indicator of 60 overbought and 40 oversold.
Buying or Selling when price enters a 240 minute area of demand/supply outlined by the green zone/red zone. First target will be opposing 240 min supply zone/demand zone and or once price crosses the 89 EMA then a close below/above the 8 EMA will be the sign to take profit or close the trade.

$USDCAD --> The Canadian Dollar just hit weekly Demand so it should now be heading UP. The ideal demand zones to join the trend upwards until we reach the daily/weekly supply zones.

trade is to wait for retraces into

Weekly

Daily

THE SETUP: Would like to go long from this 240 min demand zone thats within both a weekly and daily demand zone. I believe the trend is going to change here just like the AUDUSD when it hit weekly demand and we all know what happened next.

June 26 -> Trade Activated.

June 30 -> Moved my stop a little lower, breached my zone but there was another zone right below it.

June 30 -> 240 min chart RSI gaining strength. Need RSI to get around 40 on a dip before we rip! So added to position on this dip.

July 1 -> Good news came out this am on the ADP non farm payroll causing the US Dollar to rally, waiting patiently paid off here, but I took a gamble moving my stops.

July 3 -> Positive Employment change and employment rate data came out at 8:30am today and caused price to spike, right into some supply and then a majoyr drop. 240 min chart RSI showing me positive divergence, so I believe we still head up.

Date	2:17pm	Currency		Actual	Forecast	Previous

ThuJul 3	4:30am	GBP	Services PMI	57.7	58.1	58.6
	7:45am	EUR	Minimum Bid Rate	0.15%	0.15%	0.15%
	8:30am	CAD	Trade Balance	-0.2B	-0.3B	-1.0B
		EUR	ECB Press Conference
		USD	Non-Farm Employment Change	288K	214K	224K
		USD	Trade Balance	-44.4B	-45.1B	-47.0B
		USD	Unemployment Claims	315K	314K	313K
		USD	Unemployment Rate	6.1%	6.3%	6.3%
	10:00am	USD	ISM Non-Manufacturing PMI	56.0	56.2	56.3

$AUDUSD --> The Australian Dollar hit some daily supply and is heading down. The ideal trade is to wait for retrace into demand to catch the uptrend.

THE SETUP: Waiting for price to hit the Daily demand zone and then take it long back upwards.

$CHFUSD --> The Swiss Franc is just coming off of weekly demand which leads me to believe we may be heading up. Taking a look at the daily chart you can see price bounced twice from the weekly zone with the RSI getting stronger. Therefore, price rallied. The ideal trade is to wait for retraces into demand to ride the trend upwards.

THE SETUP:

$EURUSD --> The Euro just hit daily supply and seems to be heading down. The ideal trade is to go long from demand zones and ride the trend up.

THE SETUP: Will wait for a rally up to the daily supply zone and then short it.

$GBPUSD --> The British Pound just hit weekly supply and looks to be drop down into demand. I deal

trade is to short from supply zones.

THE SETUP:

$NZDUSD --> The New Zealand Dollar just hit weekly demand and looks to be starting to trend up. The

ideal trade is to wait for retraces into demand zones to join the trend upwards.

THE SETUP:

Futures:

The 30 Minute Chart Strategy:

Chart Setup --> Chart has an 89 period EMA and an 8 period EMA, RSI indicator of 60 overbought and 40 oversold.

Buying or Selling when price enters a 30 minute area of demand/supply outlined by the green zone/red zone. First target will be opposing 30 min supply zone/demand zone.
The 240 Minute Chart Strategy: Buying or Selling when price enters a 240 minute area of demand/supply outlined by the green zone/red zone. First target will be opposing 240 min supply zone/demand zone.

$GC_F (30) June 23 --> If gold retraces, this 30 min zone will be a great place to jump on board.

July 3 -> passed on the trade, seemed to weak.

$HG_F (240) May 12 --> Going to watch as price enters the daily supply zone, wait for weakness and short.

July 3 -> passed on the trade, seemed to weak.

$CL_F (30) July 3 --> Here's the new demand I plan to take a long position on OIL.

Stocks & Options:

The Trinity Trading Strategy:

Chart Setup --> 30 Minute chart has an 89 period EMA, a 45 period EMA and an 8 period EMA, RSI indicator of 60 overbought and 40 oversold.

The Trinity Trading Strategy

Buying or Selling when price enters a 30 minute area of demand/supply outlined by the green zone/red zone. First target will be opposing 30 min supply zone/demand zone and or once the 8 EMA crosses the 89 EMA and after the 45 EMA crosses the 89 EMA, then a close below/above the 8 EMA will be the sign to take profit or close the trade. If price action is strong, then I will add to position when price touches the 45 EMA. Finally, the position will be closed when the 8 EMA crosses the 45 EMA.

The 89 Bounce Strategy:

Chart Setup --> 30 Minute chart has an 89 period EMA, a 45 period EMA and an 8 period EMA, RSI indicator of 60 overbought and 40 oversold.

The 89 Bounce Strategy

Buying or Selling when price hits the 89 EMA and/or enters a 30 minute demand/supply outlined by the green zone/red zone. Then you must wait until the distance between the 8 EMA and 45 EMA is the same or larger than the 45 EMA and 89 EMA. Wait for close below the 8 EMA to take partial profits. The close trade when the 8 EMA crossed over the 45 EMA.

The Slingshot Strategy:
Chart Setup --> 30 Minute chart has an 89 period EMA, a 45 period EMA and an 8 period EMA, RSI indicator of 60 overbought and 40 oversold.

Buying or Selling when price hits a 30 minute supply/demand outlined by the red zone/green zone. Then you must wait until the distance between the 8 EMA and 45 EMA is the same or larger than the 45 EMA and 89 EMA. Wait for close below the 8 EMA to take partial profits. The close trade when the 8 EMA crossed over the 45 EMA.
In all strategies, exit for a loss if price breaks through the zone position is opened on.

How do I activate a trade?

5 Minute RSI Entry

A trade is activated a couple of ways: 1) If the Demand or Supply zone is a 30 minute zone or smaller or if the market is heading upwards, I will activate the trade when Price touches the zone. 2) If the Demand or Supply zone is a larger zone such as a daily zone or if the market is moving sideways or down, then I will use my 5 Minute RSI confirmation entry, to activate the trade. Take a look at the chart to understand how this works. The reverse is used when dealing with a Supply zone.

$MBI (30) July 3 --> Price hitting a nice daily demand zone, So I am taking some call options long. (Trinity Strategy in play)

July 3 -> Trade Activated, in AUG 16 $10 Call Options.
July 3 -> Stop Hit, really bad trade, bad news came out and I didn't know.

$DDD (30) July 3 --> Want price to drop a little further down to the 30 min demand zone to take this one long. (89 Bounce Strategy)

July 3 -> Trade Activated, in some AUG 16 $60 Call Options

$FUEL (30) July 2 --> Price entered the zone already but will be a nice one to jump in long at the opening bell. (Slingshot Strategy)
July 3 -> Trade Cancelled.

$NFLX (30) July 2 --> Possible Slingshot Strategy setting up here.

$JPM (30) July 2 --> Would like to see a retrace into the 30 min demand zone to take entry into some call options long. (Trinity Strategy)

$FEYE (30) July 2 --> Waiting for a retrace into 30/daily demand to take some call options long. (89 Bounce strategy)

July 1 -> Trade Activated, in early because of 5 min RSI positive divergence very close to the demand zone, plus I noticed it hit previous supply now demand. Click to learn about positive divergence!
July 3-> Stop Hit, 30 min demand breached.

Lessons:

Made a few mistakes on this trade. 1) Didn't allow the full range on the daily demand to play out. 2) Bought too high on the curve. 3) Didn't take entry in lowest demand zone in sideways market.

$LVS (30) June 30 --> Opened a position on this one based on a retrace into 30 min demand from hitting higher up supply. (89 Bounce strategy in play) Target 1 - 78.65

June 30 -> Trade activated, 89 Bounce Strategy in play.

July 2 -> took partial profits on close below 8ema on the 30 min chart.

-> Would like to close position when 80.59 is reached.

$KLAC (30) June 30 --> Opened a position on this one based on a break of 30 min supply and then pullback into the zone, now demand. (Sling Shot strategy in play) Target 1 - 74.88

June 30 -> Trade activated, Slingshot Strategy in play.

July 1 -> took partial profits on a close below 8ema on 30 min chart.

$MS (30) June 30 --> Opened a position on this one based on hitting the 30 min demand zone. In some Aug 16 31 Call options. (Trinity Strategy in play)

June 30 -> Trade activated, Trinity Strategy in play. (notice what makes this a great Trinity play is the fact that the 8ema is below the 45ema and they are both below the 89ema. Also price hit a daily demand zone)

July 1 -> took partial profits on a close below 8ema on 30 min chart.

$GPRO (30) June 28 --> Would like to get my piece of this hot IPO, when It comes down into 30 min demand.

July 3 -> Posted this setup to @MagicAlerts followers. Touched demand and left so far.

$LITB (30) June 28 --> Just came out with good guidance, but has hit some 30 min supply, will wait for the retrace and get in on the 30 min demand zone until we reach the 30 min supply up ahead at $7.30ish.

July 1 -> chart is too messy now, not interested in this trade.

July 2 -> trade worked, but didn't take it!

$ADSK (30) June 25 --> This one is retracing into a nice 30/weekly demand zone. Want to watch for 5 min RSI positive divergence within the zone for entry into some call options. Click to learn about positive divergence!

July 1 -> trade setup will be put on the back burner for now.

$NFLX (30) June 25 --> I like this demand zone on Netflix, just need to wait to see if price will get down there. If market continues weak, we may just see that.

June 25 -> supply hit but trade not taken because of bullish price action.

July 1 -> demand zone trade setup will be put on the back burner for now.