Both sides took credit for the election swings, and after today's 2.4% jump the S&P 500 sits a quarter of a percent below where it closed on election day. Workday, the payroll and HR software maker, slipped 1.4% while the market rallied, and I would rather buy it a little lower, so our order only fills if it keeps sliding on Tuesday.
Workday sells cloud software that large organisations run their people and money on. WDAY pulled back hard inside a longer uptrend. Tonight's free trade is a buy limit at $187.70, with the stop and exit written out below. Industrials led the sectors on Monday.
What caught my eye on Monday
A week of loud election takes, and the S&P 500 ended today within a quarter of a percent of its election day close.
Tonight's free trade: WDAY
Buy limit $187.70, day order
Stop: after a close beneath $166.82, sell at the next open
Exit: a close above the prior day's high sells it at the next open
Time exit: sell at the open Mon Nov 30
The stop is not an order you place: only a close beneath $166.82 counts. It assumes a fill at the limit; a lower fill lowers it by the same amount. Whichever exit comes first closes the trade.
How Mean Reversion works
The most-watched names in the market get defended. This system buys a hard pullback in a leader that is still in a healthy longer-term uptrend, with a buy limit just under the close. Out within days.
One thing worth knowing
This dip buy's losing trades run a little bigger than its winners. In our 26-year test, winners averaged +4.43% and losers -4.94%. It still pays because about seven in ten trades win: 69.3% of 2,044, for +1.55% a trade on average.
Would you take this one? Hit reply and tell me how you'd play it. I read every reply.
Below the line: 2 more swing trades and 45 day-trade setups for Tuesday, with the exact entry, stop and exit for each, plus the stops and exits on our 7 open positions.