Technology fell almost 3% and energy 4% today, but eight of the eleven sectors rose and the Dow finished higher, so the S&P 500 only lost half a percent. A soft Monday is what our Turnaround Tuesday system waits for, so it buys SPY at the open tomorrow, with the exit written out below.
The SPDR S&P 500 ETF (SPY) is the largest and most heavily traded exchange-traded fund, tracking the S&P 500 index of 500 large-cap U.S. companies. The market slid into the week, and the snap back has historically been quick. Tonight's free trade is a buy at the open, with the exit written out below. Energy fell the most of the sectors on Monday.
The market on Monday
S&P 500 (SPY) 752.10, -0.48%
Nasdaq 100 (QQQ) 681.09, -1.36%
Russell 2000 (IWM) 279.14, -0.07%
Dow (DIA) 519.34, +0.43%
VIX 21.15, +8.91%
Energy (XLE) fell the most on Monday, down 3.96%. It is still up 6.0% over the last 20 sessions.
Tonight's free trade: SPY
Buy at the open, market on open order. No price to type.
Stop: none, by design
Exit: sell at the close of the first day that finishes above the prior day's high
There is no stop by design. The trade ends on the exit rule above.
How Turnaround Tuesday works
The oldest calendar effect in the book: the index slides for consecutive sessions into the early week, and the snap-back tends to be quick. We buy the weakness and sell the first show of strength.
One thing worth knowing
The Monday rule is the edge. In our test since 2001, this buy averaged +0.58% a trade across 243 trades. Allowing the same setup on any weekday raised the count to 605 and cut the average to +0.32%, a little more than half.
Would you take this one? Hit reply and tell me how you'd play it. I read every reply.
Below the line: 13 more swing trades and 74 day-trade setups for Tuesday, with the exact entry, stop and exit for each, plus the stops and exits on our 12 open positions.