Price Patterns Part # 2
In this follow up on price patterns we continue to dig into the common price action patterns and digging through the tons of dirt looking for the gold.
Price Pattern Part #1
In this Part #1 calls we dig into the details of some the most repeatable price action patterns and where to find low risk entries.
May Jobs Report
This morning is all about the May Jobs Report that will be out at 8:30 AM Eastern. Consensus expects a strong report of growth and an unemployment number near historic lows. Consequently the futures are pointing to nice bullish open ahead of the report but of course how the market opens will depend upon the actual results.
Perhaps the number will lift the market out of its 2-day funk and the index once again reach out for new record highs. Only time will tell so stay focused on price action and avoid predicting or getting caught up in the fear of missing out chasing a morning gap into all-time high resistance. Thankfully we have a little break on the earnings calendar today but keep in mind next week is another huge week of reports so plan your risk into the weekend carefully.
On the Calendar
We have a little break on the Earnings Calendar today less than 75 companies reporting. Among the notable reports are D, FCAU, FRAM, SNR, NWL, NBL, TRP & WPC.
Action Plan
Futures are higher this morning ahead of the May Jobs Report with the exception of strong employment growth and an unemployment number near historic lows. Perhaps this is just the catalyst we need to get the market out the funk it has been in the last couple days. We will once again have to be watchful and respect the new resistance levels that recently created. A gap up into all-time resistance could easily set up a pop and drop so be careful chasing with the fear of missing out.
The market has done a good job of ignoring the political drama being played out in Washington thus far but as this drama escalates anything is possible. We have another massive week on earning reports next week so plan your risk carefully as we head into the weekend. Have a great weekend everyone!
Trade Wisely,
Doug
Bearish Engulf Follow-Through?
The SPY printed a Bearish Engulf yesterday after making a new high, and the VIX closed over $14.25. I have mentioned in the trading room we should be concerned if the VIX can close over $14.25. Yesterday ended the T-Line Run streak by price closing below the T-Line. If you use the Red/Green alert T-Line you know that is has turned Red, follow through on price will drag the 3-EMA below the T-Line causing a 3×8 trend to start. Price action, trend and support will be very important in the next few days. If we see weakness and follow-through on the bearish engulf I suspect $288.40 could get tested. Of course, the bulls could eat a Snickers Bar and bring us back, a close over $293.40 might bring the die-hard bulls back in the game. Yesterday going into the close we bought IWM puts, Double Top, Evening Star, 2-day Bearish Engulf, Price closing below the T-Line and the 3-SMA following. We also bought VXXB long ending the day with 21%
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Data-driven Confusion
With yesterday’s close leaving behind bearish engulfing candles and one would expect price to follow-through lower this morning but amidst such data-driven confusion futures are currently suggesting a modestly bullish open. That’s the nature of earnings season. Anything is possible making it near to impossible for the swing trader or position trader to hold on to an edge and becomes much more like a casino.
With more than 400 companies reporting and several possible market-moving economic reports this morning we should expect the data-driven confusion to continue accompanied by its best friend volatility. Keep in mind, we have the big Employment Situation number before the bell on Friday so plan your risk accordingly and be very careful not to over-trade.
On the Calendar
Today will be the biggest day of the week on the earnings calendar with more than 400 companies reporting. Notable reports include, ATVI, WTR, ANET, AVP, BLL, CBS, CI, ED, WW, DISCA, DWDP, DNKN, EXPE, FRT, GILD, HBI, HLF, HFC, IEP, K, MELI, MNST, MUR, NRG, PCG, PLNT, PPL, RMAX, SHAK, DATA, UAA, X, W, & ZTS.
Action Plan
After some significant bearish price action in reaction to the Fed Chairs comments yesterday afternoon leaving behind bearish candle patterns I was expecting at least little follow-through down this morning. However, as I write this the futures are modestly bullish even though Asian markets closed mostly lower and the European markets are currently trading mostly lower. Perhaps its nothing more than high hopes for good results from the more than 400 earnings reports today.
It also makes me wonder if yesterday’s selling got enough traders short to engineer a short squeeze attempt trying to get that new record high in the Dow. In light of the price action we must also consider the possibility of a pop and drop pattern. Have I mentioned I hate earnings! With so much data tossed at the market the fact is anything is possible and swing traders have very little edge in this kind of environment. Stay focused on price action, remain flexible and guard yourself against over-trading.
Trade Wisely,
Doug
MDLZ 38%
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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
Just Another FOMC Day
A typical FOMC day is usually dreary until the Fed decisions come out in the early afternoon. Before the FED decision, everyone scramble for a position and changes their mind 2-3 times while sitting on the edge of their seat. Stay calm and have a slice of pie is what I plan to do. It really is pretty simple, if the Fed news is to risky think about cash or nearly cash. If you are comfortable with your positions and they have proper stops sit back and enjoy the pie. And never forget you don’t have to trade every day and never trade out of desperation. THE SPY CHART had a hard morning yesterday thanks to GOOG, but by the end of the day the SPY came back above our T-Line making it 23 days that price has closed above the T-Line, (what a nice run). The bears are always sitting on the edge waiting for a sign to pounce on the bull in a bullish trend, and we will also be alerted with price action and candlesticks formations. Good trading traders!
✅ The following are eleven trade ideas I am adding to my watch-list for consideration over the next few days. CMRE, PG, JNJ, ADSK, ACN, ORCL, UNP, CSX, ECL, BMO, CCK
Favorite Auto Scans
✅ T-Bands Moving up
✅ T-Band Breakout
✅ 3×8 Trap
✅ T-Line Bounce
✅ RBB Setup
Game Changer:
Live Trading Alerts – A tool that saves a trader time, focuses their attention onto the few stocks/ETFs (at any given second of the day) that exhibit EXACTLY the behavior (price pattern, signal and movement) a trader desires. No flipping through charts, no waiting on someone to recommend a chart, no missing trades or uncertainty about when to act…just actionable, real-time alerts of specific trade setups.
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
FOMC Decision
FOMC decision at 2 PM Eastern will weigh heavily on the mind of the market today. With another big day of earnings behind us and another one already underway this morning the futures are pointing to a bullish open. Both the SPY and the QQQ look as if they will open in new record territory and with the Dow gaping up this morning it is within easy striking distance of joining the blue sky club. The IWM continues to lag way behind the others as if the small caps were simply not invited to party.
With over 350 companies reporting today and a full economic calendar that includes an interest rate decision from the FOMC will the bullishness roll on or will the market take a more of a typical wait and see attitude in the price action today? With so much data to digest anything is possible so plan your risk carefully working to hold on to your edge and discipline to follow your rules despite all the swirling drama of the day.
On the Calendar
Another big day on the Earnings Calendar today with more than 350 companies reporting today. Some of the notables reports today include, ALL, AMCX, AWK, NLY, APA, CAR, BP, CAKE, CLX, CREE, CVS, EPD, EQIX, EL, FIT, GCI, GRMN, HCP, HLT, HST, HUM, H, MOR, MET, TAP, PSA, QCOM, O, RCL, SO, SQ, VVV, WMB, AUY, YUM & ZNGA.
Action Plan
After a big wave of bullish earnings reports after the bell the futures are pointing to a positive open. The question is with more than 350 companies expected to report today and the FOMC Announcement at 2 PM Eastern with the bullishness grow or slip into a wait and see mode. As I write this the DIA looks to open in striking distance of new record highs joining its compadres the SPY and QQQ with only blue sky above.
The president is putting pressure on the FOMC not only to cut interest rates but begin a program of quantitative easing. Honestly, I don’t know how something like that could be justified but hey stranger things have happened. As of now the market is not expecting a change in interest rates but will look closely at their statement hoping to see no signs of growing hawkishness in the wording.
Trade wisely,
Doug
US & China resume negotiations
As US/China resume negotiations, China’s manufacturing numbers come in less than expected once again raising concerns about economic growth. Asian markets closed mostly lower overnight and European markets are mostly red this morning as well. Here in the US, both the SPT and the QQQ closed at new record highs ignoring global concerns as earnings continue to inspire the bulls higher.
We have nearly 350 companies reporting today topped with the AAPL report coming in after the bell. We also have five potential market-moving economic reports on the calendar as well as the beginning of the 2-day FOMC meeting filling the markets plate for the day. Prepare for volatility but don’t be too surprised if price action becomes light and choppy as we wait for the FOMC announcement Wednesday afternoon. I think we should expect challenging price action the rest of the week where it will be very difficult to swing trade and maintain an edge. Quick and experienced day-traders will likely have the upper hand.
On the Calendar
We have a big day on the Earnings Calendar today with nearly 350 companies reporting. Some of the notable reports are, AAPL, FLWS, AOS, AMD, AKAM, ARNC, ARCC, APRN, EAT, CHTR, CB, COP, GLW, CMI, DENN, ECL, LLY, FEYE, GE, GM, GEO, GRPN, HCA, LL, MA, MCD, MRK, MDLZ, OKE, PFE, PSX, STX, SHOP, SPG, STAG, TWLO, WELL & WH.
Action Plan
Today begins the FOMC 2-day meeting and we have a very big day of earnings reports with AAPL in focus after the bell. GE has already reported better than expected this morning and gapping the stock 7% higher in the pre-market. Commonly the price action is light and choppy ahead of an FOMC announcement but with such big morning of earnings we should prepare for the likelihood volatility.
Overnight Asian markets struggled due to manufacturing numbers coming in less than expected to close their major indexes mostly lower. Europe indexes are flat and mostly lower this morning as well in reaction to the Chian data and selloff in the miners. Consequently, US futures are mixed and pensive as earnings roll-out. Anything is possible by the time the market opens so stay on your toes, focus on price and remain flexible. Finding and holding on to an edge in the kind of environment will be very challenging so plan your risk accordingly.
Trade Wisely,
Doug
Bullish T-Line Run
GOOG was spanked last night at the earnings party, and the FNGU has dropped $2.00 in the aftermarket. I suspect today will a nail-biting day for some and others dance in the street. The difference is how the trade plans, quality of charts and allotment size that makes the difference. Either way, the SPY closed good, now 22 days in a Bullish T-Line Run. Yesterday’s close was in the form of a small-bodied candle and a small wick/shadow on top so we could see a little profit taking in the market today. Above $291.35 I will view a bullish and below not so much. Above $291.35 keep price above the 4/17 bearish engulf candle that the 4/23 candle broke out of. We close out our BAC trade for a cool 30%; we entered the trade because we liked the chart after the LTA Scann alerted us a 3×8 Trap Scan and it was a T-Band Breakout.
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Game Changer:
Live Trading Alerts – A tool that saves a trader time, focuses their attention onto the few stocks/ETFs (at any given second of the day) that exhibit EXACTLY the behavior (price pattern, signal and movement) a trader desires. No flipping through charts, no waiting on someone to recommend a chart, no missing trades or uncertainty about when to act…just actionable, real-time alerts of specific trade setups.
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
