Heikin-Ashi Trading Strategy
9-24-19 e-Learning Session
Pop and Drop
As it turns out my caution of getting caught up and chasing yesterday gap open proved to be correct, producing a pop and drop pattern at price resistance levels. The President’s tough talk on China trade practices at the UN only emboldened the bears pushing indexes lower with the QQQ suffering the worst of the technical damage unable to hold it’s 50-day average. Adding insult to injury Congress began yet another political drama that’s likely to affect the market well into the future opening an impeachment inquiry of the President.
During the night trade tensions and political uncertainty had Asian markets seeing red across the board at the close of trading. Currently, European markets are of a like mind and decidedly bearish across the board this morning. Not surprisingly US Futures are indicating a lower open for the market but let’s keep an eye on the SPY & DIA key moving average supports for a possible area of defense by the bulls. If they fail to hold as did the QQQ the technical damage could greatly inspire the bears to continue lower. Stay focused and flexible as this news-driven market continues to challenge traders.
On the Calendar
On the Hump Day Earnings Calendar we just 15 companies reporting quarterly results. Notable reports include KBH and FUL.
Action Plan
Tough talk at the United Nations from President Trump shook the markets yesterday inspired the bulls to move the indexes quickly toward a test of their 50-day morning averages. The pop and drop price action left behind some pretty nasty looking bearish engulfing candles with the QQQ experiencing the worst of the technical damage. Adding insult to injury later in the day it was announced that Congress opened an inquiry of impeachment against the President alleging abuse of power.
As the political drama continues to grow it only adds another layer of what the market hates the most, uncertainty! Unfortunately, that big festering and stinking pile of uncertainty is likely to continue making this market very challenging for traders navigate. The best we can do is stay focused on price, support, resistance, trend, and be willing to take profits quickly when you have them to avoid the potential whip of the news story.
Trade Wisley,
Doug
Can Support Hold?
The UK Parliament is back in session, with their attention not focused on Brexit, but at least at the moment on beating up Government Ministers over why they advised what they advised that led PM Johnson to think he could get away with suspending Parliament for 5 weeks. The other major news overnight was the US Congress beginning a formal Impeachment Inquiry against President Trump (although that was expected).
Overnight Asian and European markets followed the lead from yesterday’s US markets with bright red numbers across all major indices.
Today’s economic news is limited, with Aug. New Home Sales at 10am and US Oil Inventories at 10:30am. I’m not so sure either of those will make any splash against the backdrop of political news and the bears taking control of charts the last several days.
As of 7am, US futures are pointing to a small continuation of the Bearish move. The big boys (Dow and S&P) are pointing to a 0.10% and the NASDAQ a 0.25% gap lower.
The charts tell us the short-term trend is clearly bearish, with the all 3 major indices showing failing spectacularly after a strong bullish gap up at the open. They ended up printing bearish continuation signals across the board Tuesday. In the process, the QQQ also gave up the 50sma as potential support. However, if there is a ray of hope, it is that the SPY and IWM both tested and held their 50sma yesterday…and if you might say we tested the area of the 50sma and held it in the DIA. Can that support hold is the key question?
The bottom line is that it is very hard to swing trade these markets until we get less whiplash and range chop and more of that good old consistent trend action.
Ed
For Your Consideration: Here are a few tickers we will be adding to our swing trade watch-list. Long: AIZ, ARMK, CCJ, DE, ES, EXC, JACK, UNM. Short: EGHT, QSR, SBUX, CDNS, YUM, CTAS, TWLO, VRNT, MA, ACN. Trade smart, and trade your trade. Stocks we mention and talk about are not recommendations to buy or sell.
✅ SMS text alerts and reminders?👈
✅ Check out our newest YouTube videos👈
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 Dick Carp: the scanner paid for the year with HES-thank you
🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.
🎯 Bob S: LTA is incredible…. I use it … would not trade without it
🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.
🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.
Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.
Free YouTube Education • Subscription Plans • Private 2-Hour Coaching
DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it. Past performance does not guarantee future results. Terms of Service
Attack of All-Time Highs?
The bulls did a good job defending yesterday’s modest gap down open setting the stage for another possible attack of all-time highs. With several notable earnings reports today and a reading on Consumer Confidence the bulls may find the inspiration needed breakthrough the 3000 SPY resistance that has proven so difficult to hold.
Asian markets closed modestly green across the board as trade uncertainty, and global growth concerns grow. A day after disappointing German economic numbers European markets are flat to slightly bullish this morning. US Futures appear confidently bullish this morning suggesting a nearly 100 point gap up to challenge resistance levels once again. Consider your risk carefully and avoid chasing gap up entries at or near price resistance levels.
On the Calendar
On the Tuesday Earnings Calendar we have 28 companies fessing up to quarterly results. Notable earnings include NKE, NIO, AZO, BB, KMX, CTAS, INFO, JBL and MANU.
Action Plan
Yesterday’s light and chopping price action saw the bulls working to defend the lows of the morning gap down. Index futures held positive throughout the night, suggesting a bullish open and perhaps another attempt by the bulls to attack the all-time market highs. The DIA will first have to deal with the price resistance around 271, and the SPY will have to breach the resistance at 300. The QQQ’s have a considerable amount of work to do before breaking out, but it is bullish that thus far the bulls have successfully defended its 50-day average as support.
A little concerning is that we had safe-haven plays such as Gold, Silver, defensive sector stocks and even utilities were going up yesterday with the overall market. Oil stocks continue to recover after the Saudi oil field attack and yesterday saw a strong push in retail with stocks like DLTR, TGT, and WMT rising. Currently, futures point to a bullish open ahead of the Case-Shiller, and Consumer Confidence reports as well as several notable earnings. With trade talks scheduled to resume in a couple of weeks and new tariffs increases scheduled for the 15th of October, markets will continue to be news sensitive in the days and weeks ahead.
Trade Wisely,
Doug
More Uncertainty
Overnight, the big news was that the UK Supreme Court has ruled that the suspension of the UK Parliament was unlawful and void (11-0 unanimous decision). In fact, it ruled the suspension did not happen and Parliament is still in session.
The Speaker of Parliament has said the House of Commons will sit again Wed. morning. It’s unclear exactly what that means in practical terms (who controls the agenda once they meet, what members of the PM’s team get the axe and how this impacts Brexit). There was even talk about the PM himself needing to step down. Needless to say, this does give the “No – No Deal Brexit” and “New Referendum” camps a stronger hand…and if you believe PM Johnson, hurts the UK negotiation position with the EU.
On the US news front, apparently President Trump was completely unaware (and shocked to hear live in front of the press) that it was the US Negotiators who canceled meetings and asked the Chinese to leave without touring the US farm belt. (Speculation is that Treasury Sec. Mnuchin did not want the US public to wrongly assume from such a tour that a deal was near.) Also, two Fed speakers implied that even the most Dovish FOMC member foresees only 1 more cut this year and the majority say none.
For markets, this is all just more of what traders love…uncertainty. (That’s sarcasm.)
Markets ended Monday flat after a gap down as the short-term trend continues to be Bearish. However, there is clear potential support just below. Futures are pointing higher at the moment about half a percent. Overall, I read this as more chop until we can break out to new highs.
Ed
For Your Consideration: Here are a few tickers we will be adding to our swing trade watch-list. Long: CCJ, VZ, PG, FRAC, GT, CPRI, HOME, TUP, LEN, APA, DLTR, WFC, OLN. Short: QSR, TWLO, HEI, HCA, VRNT, BLL, ROL, FIS. Trade smart, and trade your trade. Stocks we mention and talk about are not recommendations to buy or sell.
✅ SMS text alerts and reminders?👈
✅ Check out our newest YouTube videos👈
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 Dick Carp: the scanner paid for the year with HES-thank you
🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.
🎯 Bob S: LTA is incredible…. I use it … would not trade without it
🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.
🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.
Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.
Free YouTube Education • Subscription Plans • Private 2-Hour Coaching
DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it. Past performance does not guarantee future results. Terms of Service
Technical Contradictions
As we approach the end of the 3rd quarter, the index charts are displaying technical contradictions that reflect the uncertainty faced by the market. While holding above their respective 50-day averages the DIA and QQQ have left behind low high failure patterns, and the SPY is displaying a possible double top failure pattern. The technical contradiction makes for some very difficult trading decisions in this very news-driven and emotional market.
US Futures open trading Sunday evening quite bullish but faded as Asian markets struggled with US/China trade developments closing mostly lower on the day. Weak German economic data has the European indexes seeing red across the board this morning. US Futures point to a flat to open, and with little on both the economic or earnings calendars to provide inspiration, expect political news sensitivity and possible choppy price action.
On the Calendar
To begin the week on the Economic Calendar we have just 16 companies reporting results but among those stepping up, I can no particularly notable reports.
Action Plan
Although Iran continues to deny the Saudi oil field attack the President has decided to send troops into the Persian Gulf to bolster the Saudi Arabian forces as tension continue to grow. Friday the Chinese negotiations team abruptly cut their visit short, and then during the night the US Justice Department warned companies that Chinese corporate theft is rising. Attorney General Adam Hickey reported that more cases are being open that implicate China for trade secret theft and that 80% of the economic espionage cases since 2012 involve China.
US Futures opened last night very bullish but have sold-off and currently indicate a flat to slightly bearish open. With little more than Fed speakers on today’s economic calendar and no market-moving earnings report, the market will have to find inspiration elsewhere. Technically the DIA and QQQ are now showing lower high concerns and the SPY chart displaying an uncomfortable double top failure forming. On the bullish side, however, all the indexes remain above their 50-day moving averages and continue to cling to a current uptrend. As of now the charts seem to reflect the political uncertainties and difficult trading decisions.
Trade wisely,
Doug
Waiting on News
On Friday all the major indices fell further after the latest failure at all-time high resistance. Dovish spin in the news (related to a China Trade Deal) was met by the President saying a small deal would not be enough for him to lift tariffs. There was slightly positive news out of Brexit negotiations (if you’re smart enough to handicap that race), but a UK Court Ruling early this week will stir that pot again.
Coming off Friday’s ugly candles, we would expect a lower low today. The futures are indicating a minor move down at this point (a tenth of a percent). With that said, we have previous support not far below in all indices with the VXX having resistance just above.
Personally, I will use the short-term trend as a guide, expecting the pullback to continue until the bull prove otherwise. With no major news on the calendar for Monday, I expect this news-driven market to drift more before getting a push. Bulls have looked for any excuse to buy, but at this particular moment, I don’t see one yet today.
Ed
For Your Consideration: Here are a few tickers we will be adding to our swing trade watch-list. Long: CELG, CNP, CNQ, CVS, DOW, DUK, GT, HCSG, KIM, L, LEN, NRG, VZ. Short: BLL, EGHT, FIS, HCA, HEI, MA, SBUX, VRNT, YUM. Trade smart, and trade your trade. Stocks we mention and talk about are not recommendations to buy or sell.
✅ SMS text alerts and reminders?👈
✅ Check out our newest YouTube videos👈
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 Dick Carp: the scanner paid for the year with HES-thank you
🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.
🎯 Bob S: LTA is incredible…. I use it … would not trade without it
🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.
🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.
Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.
Free YouTube Education • Subscription Plans • Private 2-Hour Coaching
DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it. Past performance does not guarantee future results. Terms of Service
Slow Grind
The market (SPY), The slow grind higher starting in December 2018 certainly has been a grind and at times seems like we are just crawling. But if you look at a weekly chart on the SPY, you can clearly see we have moved about 70 points, not bad for the SPY.
On the daily chart, you can see that the past 10-11 trading days has been that slow (crawl) grind I was talking about. Yesterday the SPY formed a little Shooting Star, double top, (sounds painful). Well, it could be with follow through to the point of cracking the trendline until then we simply have the slow grind higher. With the T-Line and T-Bands still moving up and price action above all the T-Bands, it implies the bulls (buyers) are still in control. While price action the last few days has been a bit slow I continue to see bullishness with reasonable profit-taking along the way.
The I path Series S&P 500 VXX Short Term Futures ETN. The VXX closed with a little Hammer near a double bottom, and the VXX is oversold. With a bit of Bullishness, the VXX might do a little relief rally.
Ya baby it’s Friday! Friday’s are more about profit-taking and getting ready for the weekend. There are no watch-list updates on Fridays. We wish you a fantastic weekend. 🌞Rick Saddler
✅ SMS text alerts and reminders?👈
✅ Check out our newest YouTube videos👈
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 Dick Carp: the scanner paid for the year with HES-thank you
🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.
🎯 Bob S: LTA is incredible…. I use it … would not trade without it
🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.
🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.
Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.
Free YouTube Education • Subscription Plans • Private 2-Hour Coaching
DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it. Past performance does not guarantee future results. Terms of Service
Resistance
While the DIA and SPY continue to hover just below around all-time high resistance levels, yesterday’s price action left more concern rather than confidence by the end of the day. Technically speaking the current trends in major indexes remain bullish even though the resistance above has proven to be difficult to penetrate thus far. With very little on the earnings or economic calendars today the market may struggle to find inspiration as we head into a weekend that could include retaliation for the Saudi oil field attacks.
Asian markets closed the week mixed but mostly higher as low-level trade talks begin. European indexes are modestly green across the board this morning, and the US Futures currently point to modest gains at the open. With contradictory candle signals, trends and all-time resistance levels just above ahead of an uncertain weekend anything is possible. Plan your weekend risk carefully.
On the Calendar
On the Friday Earnings Calendar, we have just four companies reporting results today. I see no particularly notable reports today.
Action Plan
Vice President Mike Pence is now publicly calling the attack on Saudi oil fields as an act of war. According to reports, President Trump will be briefed on retaliation options in the next couple days. What comes next is anyone’s guess? The President has also granted a few more tariff exemptions as US and China move into low-level talks.
Although the indexes were unable to sustain yesterdays rally the DIA and SPY continue to hover around all-time high resistance levels. Current trends are clearly bullish, but yesterday’s price action was not exactly confidence inspiring by the end of the day. As we head into a weekend with trade talks and a possible retaliatory response on the oil fields it will be interesting to see how much risk traders will be willing to hold. With only Fed Speakers on the Economic Calendar and no notable earnings reports today, the market will have to search or inspiration elsewhere. Plan your risk carefully and have a wonderful weekend!
Trade Wisely,
Doug
A bit Disappointed.
After cutting rates for the second time, the market seems a bit disappointed this morning the, FOMC didn’t clearly signal more rate cuts this year. With Powell pointing to strong US economic indicators and with three dissenting committee members on this cut, the path to future reductions looks challenging. During the night the BOJ held current rates, and this morning the Bank of England did the same. Unfortunately, there is still plenty of uncertainty with a possible Iran retaliation action, Brexit, US/China trade talks & scheduled tariff increases to make the weeks ahead challenging.
Asian markets closed mixed but mostly higher with Hong Kong markets continuing to slide south as the unrest in the country continues. This morning European markets are all modestly higher after the BOE decision to stand fast on interest rates. US Futures point to modest declines at the open ahead of a busy morning on the economic calendar of possible market-moving reports. Keep your seat belt fastened the road ahead could still be very challenging to navigate.
On the Calendar
On the Thursday earnings calendar, we have just 11 companies reporting results with DRI as one of the most notable on the day.
Action Plan
Evidence is growing from the remnants of the drones and cruise missiles used in the Saudi oil fields attack that Iran is the culprit. Saudi Arabia will present its evidence to the United Nations and framing the incident as a global community threat. The President has ordered much tougher sanctions against Iran but to this point has shown constraint for a military confrontation. A day after the FOMC decision US Futures point to a modestly lower open seemingly disappointed with the FOMC decision.
During the evening the Bank of Japan choose to hold rates steady, and this morning Bank of England decided to stand pat on interest rates even as Brexit uncertainty grows. With that now out of the way the market will likely focus on the coming US/China trade talks early next month, the issues surrounding the intensifying Brexit decision, as well as the coming 4th quarter earnings. A possible retaliation attack on Iran remains a wild card that could upset the applecart in the short-term.
Trade Wisely,
Doug
