Less Aggressive FOMC
Did anyone notice a sparkle in Jerome Powell’s eye and check for reindeer on the roof as he delivered the huge gift of a less aggressive FOMC? Moments, after he began to speak the gates opened and the bulls unleashed a huge wave of buying that quickly cut through pesky price resistance levels. Currently, the US Futures are pointing to a modest gap down open this morning, but a little profit-taking after such a huge one-day bull run should not be a big surprise.
Keep a close eye on the price action because the sheer momentum of yesterday’s move could inspire the bulls to continue pushing forward into the weekend. Now the market will focus it’s attention on the G20 meeting and hoping it will help deliver the bigger gift; progress on the US / China trade negotiations. With the harsh rhetoric and threats lobed back an forth between the two leaders that might be a big ask. Stay focused on price action the clues will be there.
On the Calendar
On the Earnings Calendar, we have our biggest day of the week with 54 companies expected the report to keep us on our toes.
Action Plan
The Fed Chairman Jerome Powell triggered a bullish stampede yesterday indicating a less aggressive
FOMC than the market had expected. The burst of buying cut through resistance levels in the indexes as if a pressure value suddenly opened. After such a huge move its not unreasonable to think there will be some profit taking and according to this morning’s futures we should see a modest gap down.
If we could now get a trade agreement between the US and China, Santa’s could come to town in a newly turbocharged sleigh! Unfortunately, it’s not all sunshine and roses this morning with the news of a police raid on Deutsche Bank with allegations of money laundering. After the morning pullback, keep a close eye on the price action, yesterday’s huge momentum could keep the Bulls pushing forward into the end of the week.
Trade Wisely,
Doug
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G20 Trump China Up Next
G20 Trump and China up next, if they can ease the tension like Powell did yesterday Santa could be back in town. Of course, it may be coal for us if the kids don’t play nice. Yesterday we saw a huge move in the market, DJ-30 up over 600 points! The SPY has seen nothing but three days of bullishness with yesterday being the big winner. Price has nearly come back to challenge the 200- and 50-SMA’s and the close yesterday was above the 50% line from the recent high to the recent low. We should expect a little rest and inside action today and possibly a challenge of the 200-SMA before the weekend. Looking forward to pulling a few profits off the next two days.
Live Trading Alert Hot List
CYH recently was a Rounded Botmm Breakout set up and now has broken out above the 200-SMA on good volume. The 20-day chart pattern is a near perfect J-Hook Continuation pattern. With yesterdays close above $4.00 CYH may be getting ready for the next level. Add CYH to LTA-Live Trading Alerts Real Time Market Scanner watchlist for a buying alert. CYH bullish above $3.90, stop below $3.79
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Developing and Maintaining a Trading
Edge to Improve Your Win/Loss Ratio
In this video, Doug Campbell talks about Developing and maintaining a Trading Edge to improve your Win/Loss Ratio. He discusses how professional stock and option traders develop a trading edge. Improving your Win/Loss Ratio requires a consistent process and set of rules to protect you from you biggest trading enemy. You! As a stock trader and option trader you’re in competition with all other traders that are trying to take your hard-earned money away from you.
Trading without an edge reduces your odds of success and your win/loss ratio will suffer as a result. Maintaining a trading edge requires a disciplined and relentless pursuit of consistency to reach your goals and grow your account. Start to develop your trading edge today.
1 hour 20 minutes
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Candlesticks • Price Action • T-Line • T-Line Bands • Support • Resistance • Trend • Trendlines • Chart Patterns • Buy Box • Volatility Stops • Profit Zones • Entry Zones • Protective Stops • RBB Rounded Bottom Breakout Strategy • Pop Out of The Box Strategy • Pinball Strategy • Trade Planning, Fibonacci, Stoch/RSI
Investing and Trading involve significant financial risk and are not suitable for everyone. No communication from Hit and Run Candlesticks or it’s associates should be considered as financial or trading advice. All information is intended for Educational Purposes Only. Terms of Service
Relief Rally?
Although volume remained light a relief rally is still a welcome site! The bulls found the energy to not only defend the support of yesterdays gap down but also push the Dow into the November 20th gap. A good start but let’s keep in mind that with so much technical damage and the threat of increasing tariffs just around the corner the price action is likely to remain very challenging. The QQQ is only a couple days away from joining the IWM with a death cross, and the DIA still has the 200-day average as resistance.
Of course, a trade deal with China would be a game changer but now seem less and less likely as the rhetoric continues to fly between the two countries. Asian markets closed sharply higher overnight, and European markets are currently mostly higher as well. As a result, the US futures are pointing a gap up open of more than 100 points this morning. As nice as it is to see the bulls running, please remember to respect the overhead resistance. Chasing into the market on a gap up near price resistance levels is a dangerous business. It would be wise to wait and see if buyers step in to support the gap or if profit takers take the gift provided by the gap.
On the Calendar
On the Earnings Calendar, we have just under 40 companies expected report so please continue to check new and existing positions as part of your daily preparation.
Action Plan
After a concerning gap down yesterday the bulls hung in there defending support moving the indexes higher even though volume remained quite low. The big gap down created on 11/20/18 now has a good chance of being filled and challenging the nest level of resistance. Unfortunately, the QQQ is only a couple days away from joining the IWM with a death cross. We should expect challenging price action and volatility to continue.
Even with the current relief rally, we must keep in mind that the overall markets are still in a downtrend. That means we have to be on the lookout for possible failures as we approach resistance levels. This morning the futures are pointing to a gap up open, and we all know that brings with it the possibility of the dreaded pop and drop pattern. If you’re already long, remember that gaps are gifts and consider taking some profits. However, if you’re looking to enter a new position, make sure there is follow-through buying supporting the gap.
Trade Wisely,
Doug
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Wall of Worry Powell Trump China
The Powell, Trump, China wall of worry are a few of the troubles the market is dealing with. Powell to speak today and the upcoming Fed meeting Dec. 19 may shed positive light or lay a dark cloud over the market. The G20, Trump and China meeting might remove some of the walls of worry or add more. The technical fracture the market is also a problem and will take time to resolve.
Another positive day yesterday for the SPY, about $273.25 remains the number the bulls need to beat before they can advance. Above $265.45 keeps the bull from drowning but struggling.
BABA RBB Setup
We are already long BABA
BABA has been flirting the RBB set up with price closing over the 50-SMA the past 2-days. The bottom construction looks solid with an Inverted Head and Shoulder formation. The weekly chart found support on the Dotted Duece and has now closed back above the weekly T-Line. The typical RBB trade target direction is the 200-SMA. BABA has been added as a trade candidate to add to our LTA-Live Trading Alerts Real Time Market Scanner watchlist for a buying alert. BABA bullish above $156.502, stop below $147.65
Members, please log in to the member’s blog for more Trade-Ideas. Start here for membership or a trial
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- Hit and Run Candlesticks
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Rick uses three main trading tools and has dialed them in for max performance. Rick also freely shares his insights on what makes the tools the best and how to use them. Rick is also one of the only traders in the industry that shares his trading account. Traspaerancey and Trading Results.
- LTA – Live Trading Alerts Get your 30-Day Trail
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YouTube Videos
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DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from us should be considered as financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates or representatives is intended for educational purposes only. You are advised to test any new approach before implementing it. Past performance does not guarantee future results. Terms of Service
Follow-Through?
After the big gap and rally yesterday I was hoping for a little follow-through today, but a little profit taking would not be that unusual. So far this morning presidential trade war threats have trumped the record-breaking Cyber Monday sales event. (pun intended) As a result, AAPL is under a little pressure this morning as the hits keep on coming for the battered tech sector.
If the Bulls can defend yesterday’s low in the QQQ’s, then the strong holiday sales should extend the relief rally. However, if the Bears are allowed to breach yesterday’s index lows fear could easily win the day, and a retest of last Tuesdays low would not be out of the question. Volume should return of the next few days so be patient, disciplined and focused on price action. We all want to see the market recover but what we want is not important. See the chart for what it is not as we want it to be!
On the Calendar
On the Earnings Calendar, we have 33 companies reporting result today.
Action Plan
The online shoppers worked hard all day yesterday increasing yesterdays Cyber Monday sales by nearly 20% over last year and setting new records. Now that the Thanksgiving shopping events are over and vacations ending volume should begin to return over the next couple of days. Unfortunately, futures are pointing to modest gap down this morning with the president threatening tariffs on all imported iPhone’s from China. Consequently, AAPL is under a little pressure this morning putting even more pressure on the already vulnerable tech sector.
After such a big rally yesterday some profit taking would be normal but if the sellers breach yesterday’s low a retest of last Tuesday’s could be possible. However, if the bulls can defend yesterday’s low’s then a move higher to test resistance seems likely assuming trade war rhetoric doesn’t get in the way. Be patient, flexible and focused on price action without bias, remembering there is no need to rush to a trade. The volume will return, but I would not be at all surprised if it does so slowly over the next few days.
Trade Wisely,
Doug
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