Big week of earnings this week, double check your positions and new buys, do you want to hold them through earnings? The past few weeks have been very good to most traders, and last week was no exception. Last week the SPY was in chart pattern creation with Monday’s pop and the next four days creating a PBO, continuation pattern. If you follow the Volatility stop, you can see five dot support line. Last week also remained above the T-Line and the 50-SMA. Above $260.60 January 23rd low we will remain bullish looking for the buyers to challenge the $271.00 area. When reading a chart, I find it is helpful to look at Price Action, Support, and Resistance, The T-Line and the Red/Green Trend/Line. The price action of the CBOE Market Volatility Index (VIX) closed Friday below the T-Line and the Red/Green trend line. Friday’s close did not produce any bullish buyers of the VIX. However, the VIX is testing the 200-SMA once again so we may see some a relief rally this week.
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A close over the T-Line today would be the 15th-day price action has to lead the T-Line into bullish battle. Price has tightened up the last three days, the Doji yesterday is the smallest of the 3 and yesterdays low was higher then Wednesdays candle. The past three candles have also had slide into last weeks support area. This week the sellers have tried to push the buyers into a hole but have failed thus far, the buyers have hung on tight to the road traveled from the December lows. A strong bull will be wanting $266.50 followed by $270.50 a strong bear will want $258.60 followed by $255.65. The VIX-X price action has failed to close above the 50-SMA after a minor challenge. But the bottom building is possible and real.
Friday is a good day to collect a fw of those profits and take a few loss if needed. It’s kinda scary holding too much over the weekend with all the political BS and the unknown. Good trading to all and have a great weekend.
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Our government works in mysterious ways as two failed votes
to reopen the government inspires confidence that a compromise may be forthcoming.
That hope is inspiring the bulls this morning with the US Futures
suggesting a substantial gap up
open. Earnings, Durable Goods Orders, and
New Hope Sales results may enhance the bullishness or temper that sentiment by
the open but so far the bulls appear firmly
in control.
While the indexes were content to consolidate there was steady
buying pressure showing up in a lot of stocks
yesterday. I personally found it very difficult not to overextend myself with so many great looking chart patterns and
setups appearing. As for now, this is a stock pickers market with a lot of good price action signals. Unfortunately,
we still have to hold our breath as we enter positions because all the
government uncertainty could easily reverse the current sentiment in about half
a heartbeat. Keep that in mind as you
consider the weekend ahead and the risk that can bring to your portfolio.
On the Calendar
Durable Goods Orders – Consensus – 8:30 AM Eastern
New Home Sales – Consensus – 10: AM Eastern
Baker-Hughes Rig Count – 1:00 PM ET
On the Earnings Calendar,
we have 38 companies reporting. Notable
today: ABBV, APD, CL, DHI, LEA, NEE, SYF, & VOD.
Action Plan
While the indexes continued to consolidate yesterday, there was consistent buying pressure
showing up in a significant number of stocks.
So many in fact it was difficult to
stick to my plan and avoid becoming over-committed while still testing
resistance in the indexes. Both bills voted
on yesterday to reopen the government failed, but
that is now being viewed as a good thing because Senate leadership is finally
trying to work out a compromise.
Overnight Asian markets rallied despite the trade war
jitters that continue to crop up every few days. European markets are also bullish this
morning helping the US Futures point a substantial gap up open of more than 150
points as a write this. Of course
Earnings and the two big economic reports could certainly change that before
the open. With the renewed hope that the government shutdown may
soon consider your holdings carefully as
we move into the weekend. If the market
does open with a nice gap up, I will likely
bank some profits to reduce my weekend risk.
I wish you all a great day and a fantastic
weekend!
Buyers are holding off the sellers in this bullish pullback. The SPY printed another lower low yesterday, and then the buyers stepped over the sellers closing well above the low. The price action of the SPY is flirting with-testing the 50-SMA and the $258.60 support area, what I would call a bullish pullback. Here is why I think the bullish pullback is good for the overall market, let’s look at the past five candles. The past five candles are drawing what could be a bullish continuation pattern, of course, it is based on the buyers holding support. If the bullish continuation pattern pans out the next target area would be about $270.50. And if the sellers walk all over the buyers $255.65 and $251.40 will be in the cards.
Notice how price action is trending above the T-Line and the Red/Green Dottrend in the chart below, we will remain cautiously bullish until we see a compelling bearish candlestick pattern with follow-through the breaks the bullish trend.
For more information about the Red/Green Trend line, Dotted Deuce or anything about our charts, consider joining us in the HRC trading room. We start at 9:10 Am each trading day. 60-Day Trial
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The market appears stuck
between a rock and a hard place as talk of an economic
slowdown, political uncertainty both domestic
and abroad, and earnings season unfolds.
Indexes dance between significant levels of price resistance and current short-term trend supports waiting for
the event that will determine direction.
While I believe it’s very healthy that the markets are consolidating all
the outside influences means traders will have stay on their toes and prepared for just about anything.
Be cautious about over-committing
to a directional bias as we chop around in this tight price action range. Just one event could change direction, and unfortunately,
that could easily happen overnight. Yesterday’s
whipsaw price action should serve as a reminder
of a nervous market and how quickly sentiment
can shift.
On the Calendar
On the Earnings Calendar,
we have the biggest day this week with 125 companies reporting results. Notable
earnings: ISRG, ALK, BMY, DFS, ETFC, FCX, HBAN, INTC, JBLU, MKC, NSC,
RCI, LUV, SBUX, UNP, GWW, WDC.
Action Plan
There was more conversation from IMF’s Lagarde about an economic slowdown overnight with China as the
point of concern. As a result, we see muted and mixed markets around the world. As I write this US Futures, suggest a flat open, but
I suspect that could change dramatically as the morning earnings results roll
out. Two bills to end the government
shutdown mover forward to a today but
both are currently expected to fail. That’s
really not important, but the heightened political spin leading up to
the vote and the aftermath could certainly
affect the market attitude.
As of now the Bulls and Bears appear deadlock with the
indexes slipping into a consolidation range.
Personally, I think this rest is healthy
for the market as we build a level of price action support just above the 50-day
moving averages. Unfortunately, with all the political uncertainty, economic
slowdown talk and earnings results just one event
could substantially change market sentiment.
That could mean a fast move up or a fast move down, and traders should
prepare for the possibility of either. A
directional over-commitment could be a mistake as we continue to dance between
support and resistance levels.
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 it 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
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 it 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
The trade war with China set off a little selling yesterday bringing in fear to the market, as stated yesterday we are cautiously bullish. As you can see from the 4-hour chart, the trend went from red to green. Price has followed the green dot trend challenging the Dotted Duece. Yesterdays fear brought in what looks like normal profit taking down to a minor support line and still above the $258.40 support line. With price closing above the $258.40 trend line and the Red/Green Dot trend, we will remain cautiously bullish until we see a compelling bearish candlestick pattern with follow-through the breaks the bullish trend.
For more information about the Red/Green Trend line, Dotted Deuce or anything about our charts, please consider joining us in the HRC trading room. We start at 9:10 Am each trading day.
VIX–X Chart – The Vix chart became a little bullish yesterday, and we are watching it like a hawk. If we see Bullish follow-through from the Morning Star signal printed yesterday, we will reevaluate ous trades and look at shorts/Puts
Stock picks or trade ideas without the education will cost you your hard earned money. HRC Watch-list Trade-Ideas – We are adding the following to our trade-list: BERY, BBBY, PG, EA, SLB. Learn how to trade before you trade. Past performance does not guarantee future.
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Built-In (Included) Scan Definitions. Bullish and bearish, Continuation, moving average crossovers and bounces. (RBB) Rounded Bottom Breakout alerts, intra-day, daily and weekly, Candlesticks stick signals and more. Scan Definitions- Download FREE
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 it 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
Although the selloff yesterday may have been painful for may
long traders there was a silver lining showing at the close. After a hard test of their daily 50-averages, all four
of the major indexes bounced and closed at or just above this key psychological
support. This morning US Futures are
currently suggesting a bullish open, but
a lot will depend on the morning earnings
reports if that holds.
With little on the Economic Calendar today, political uncertainty
and global growth concerns, there is significant
pressure for companies to perform and prove they
can support current price levels.
Yesterday the VIX indicated a little fear is coming back into the market. Couple that with earnings and we have a recipe
for increased volatility hinged directly upon earnings results.
On the Calendar
On the Earnings Calendar, we
have 93 companies reporting today.
Notable reports, F, ABT, CP, CTXS, CCI, FFIV, KMB, LRCX, LVS, NG, PG,
TXN, UTX, & XLNX.
Action Plan
A decline of 3% in Existing Home Sales yesterday enhanced the
premarket fears of an economic slowdown pushing the Dow down 300 points. However, after a hard test of the daily 50-averages, the bulls responded showing at
least an initial willingness to defend it as support. As tenuous
as it may seem, the uptrend is still valid thus far and perhaps we a consolidation
will develop. Earnings Reports will be a
key element over the next few weeks that determine
market direction.
According to new reports,
the Presidents proposal to reopen the government will come to a vote later this
week, but the opposition vows it will not pass.
Pressure from employee groups continues
to increase as some 800,000 continue to work without pay. Futures this morning are pointing to a
bullish open currently suggesting a gap up of more than 100 points providing
some relief to yesterday selloff. Unfortunately, the bullishness has little to no
tailwinds with Asian market having closed
nearly flat on the day and European markets
mixed but currently mostly lower. With little
on Economic Calendar, today Earnings Reports
will be in high focus.
