Creating a watchlist and the morning emotion.

Understanding the morning in trading seems like the hardest thing in the world.  Its very volatile.  It can give false signals.  It can confuse the crap out of you and have you down a few hundred bucks within 3 minutes of the market.  I experienced a ton of hardships attempting to learn the opening bell of the stock market (that is between 9:30-10AM)  I just sucked at it so I just quit trading it.  But I have always been told it is the most profitable time to be trading.  I knew there was a way I just had no idea how to fully grasp the concept.

One of my best trading buddies is Jon Schrager.  We talk constantly about charts, our ah ha moments and anything that we can use to better our trading.  We are constantly trying to learn and share ideas.  Recently we have been talking about some things we have learned about the open.  Most of what I am blogging about right now I learned from him.

That was my watch-list entering Monday 3/21/2016.  Now I was unable to trade the open but lets look further into the Daily and intraday charts of a few of these stocks

This was the daily entering Monday.  I can almost guarantee most people saw red and were only preparing for a short.  Me a month ago would have done the same thing.  Review my plan for the day, If SM gaps up or bounces at the open I would short.  But if it opens weak I am looking for a long.  Before I get into the intraday action notice a few things.  Stock is in a bullish trend.  It had already pulled back from 20.50 to 18.00 in one day ( a pretty big move for a 18ish dollar stock)  What do you think could happen if the stock drops any more, is there more likely to be more sellers then buyers or visa versa?

1.  Stock opens weak and even pierces the previous days low.  Your first thought is "This is probably heading lower.  Nope, stock explodes and goes green.  Anybody that shorted is out now.  Its rejected at "baby" resistance and pullsback to 2 which forms a higher low and mini flag with a wick and then its off to the next level of resistance for almost a 1.75 move depending on where you bought

 WLL this one had a similar daily chart as SM but under the hood it had not actually gotten to an area of interest for a bounce as you can see from my notes.

This opened up similar to SM and tried to actually go green but failed quickly.  Again from my notes I was not looking for just some weakness to go long I wanted it to flush out to 7.50-7.80.  If I was trading this I would have taken it short on the break flag crack as soon as I saw that wick into resistance and the 20ema.  Not too surprisingly the low of the day was right in the middle of the range I was watching a bounce for.

I had SM on watch today for a weak open red to green.  As soon as it broke the highs of the previous day and tripled tapped it was off to the races to the next level of resistance 20.50s

Jon actually found this one for watch.  Stock was over extended on the daily.  Ideally the plan would have been for one more push until resistance on the daily (around $23)  But the stock had other plans in mind.  Lets first notice that the stock was extended on all time frames even intraday from Monday.  It gapped down under and was under support now.  Many times you could get confused and think that it actually held a support based on the first candle but the stock was extended and trend had just changed with the gap down.  Stock forms a bear flag and the quick flush is on.

NFLX see notes pretty self explanatory.

Lesson from the past few days.  The open can be easy if you know what to look for and how things COULD react.  Because in the end the stock could do whatever it wants.  1.  Know what the trend is
2.  Is it closer to support or resistance. 3.  What did it do on the previous day 3.  If it gaps up or starts strong my plan is X  If it gaps down or starts off weak my plan is Y