SPY 2-Day Chart Printed Bullish Engulf
The good news: The SPY 2-day chart has printed a double bottom Bullish Engulf all on the 200-SMA. So is this the start of a bullish turnaround? The answer is in whether or not we have bullish follow through over the first hurdle $273.25. The bad news is the SPY like the other indices are in a painful downtrend with a ton of resistance above. Trade considerations and rate hikes continue to add bearish weight to this market. Smaller and fewer positions and quicker profits seem to be the key in this market.
TAL RBB Setup
TAL is an (RBB) Rounded Bottom Breakout Setup and finding support on one of our lower band lines. In the last few weeks price has rallied up and rested with a Flag formation. The rule of thumb is that on a breakout price should move to the next resistance level. The typical RBB trade target direction is the 200-SMA. Adding TAL as a trade candidate to add to our LTA-Live Trading Alerts Real Time Market Scanner watchlist for a buying alert. TAL bullish above $29.15, stop below $27.75
****VXX – Yesterday the VXX chart shows that a little fear was leaving the party. Be careful this party can start up again at any time.
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Record-Breaking Holiday
It would seem the record-breaking holiday spending is bringing out a wave of bulls this morning squeezing the bears that held short positions over the weekend. The Dow is currently expected to gap up nearly 250 points. As nice as is to see some relief in the selling be careful not to get caught up in the morning hype chasing into the gap. First, consider that volume has the potential of being light today as many traders extend vacations and that the Cyber Monday sales event will attract a lot of attention away from the market.
Secondly, keep in mind that one day does not make a trend and that all the index charts have significant price resistance levels above. While it’s true, this could be the beginning of a Santa Claus rally it could also be nothing more than a pop and drop unless we see real buyers stepping in to support the gap after the open. If you happen to be in long positions, then remember that gaps are gifts, consider taking some profits. If, like me, your mostly flat this morning then we have already missed the move which means there is no need to rush. Maintain, your discipline, don’t chase and wait for the next entry that provides you an edge.
On the Calendar
We have 42 companies on the Earnings Calendar expected to report results this Cyber Monday to keep us on our toes.
Action Plan
The bulls seem very inspired today as holiday shopping blows past all previous records and its far from over. The estimates for today’s so-called Cyber Money sales event is expected break records as well with more than 7 billion in online sales with the vast majority coming from mobile devices. It would seem shopping from the phone has now become the preferred method of holiday shoppers.
As I write this the Dow futures are pointing to a gap up of more than 250 points. Anyone caught short will most certainly experience the pain of a short squeeze this morning. With the nasty winter storm that swept across the central US, travelers found themselves trapped at the airport as 1000’s of flights canceled. Combine extended vacations, travel issues and Cyber Monday I would be very careful about chasing into this mornings pop until we see buyers stepping up to support the gap. It’s entirely possible that volume could be light today after the morning rush so keep a very close eye and price action. As nice as it is to see a relief rally keep in mind the indexes have significant resistance levels above which means a pop and drop day is not out of the realm of possibility.
Trade Wisely,
Doug
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SP-500 Set To Open Higher
The SP-500 is set to open higher this morning and the DJ-30 set with a triple-digit open, but the big question is this the start of a bullish turnaround? To be a bullish turnaround, we would need to see a bullish bottom constructed and price above $271.90 on the SPY. On the other hand, a good bullish bounce would make for a great relief rally. Last week was another hard week for stocks, and the negative candles on the indices proved it. FANG stock remains weak as can be seen on the FNGU chart, price below the T-Line and the T-Line below the 34-EMA.
BECN RBB Setup
BECN is an (RBB) Rounded Bottom Breakout Setup, not that price has closed above the 50-SMA, and there is at least 10% between the 50-SMA and 200-SMA. The Bullish Engulf a few days ago was a bottom test followed by bullish follow through. With a swing target near the $42.50 area, BECN is a trade candidate to add to our LTA-Live Trading Alerts Real Time Market Scanner watchlist for a buying alert. BECN bullish above $31.75, stop below $29.90
****VXX – At the close Friday the VXX chart was on the bullish side suggesting fear, below $36.00 would suggest fear is under control while over $36.00 would suggest fear is once again fueled.
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Black Friday
If the news reports are correct, holiday shopping in-store and online as consumers displayed their economic confidence and ravenous desire to grab a Black Friday bargain. Unfortunately, that has not translated into bullish price action the US Futures. Instead, the market is reacting bearishly this morning with news reports suggesting the US/China trade war could extend well past the end of this year.
Currently, the Dow is pointing to a gap down of nearly 150 points testing Tuesdays low after the morning rush don’t be surprised to see very light and choppy price action as traders extend their holiday vacations and join the Black Friday shopping masses. My plan for the day is to monitor current positions only and avoid adding risk into the weekend.
On the Calendar
We have only 9-companies reporting earnings on this partial day of trading. That number will jump up between the 40’s the and 50’s next week as some of the last 4th quarter reports continue to trickle in.
Action Plan
New concerns that the China trade war could extend through the 2020 presidential election has the US Futures turning south this morning. According to news reports Thanksgiving in-store and online sales may have hit new record highs yesterday as confident consumers shopped a good deal of the holiday. Best Buy has reported Thursday transactions numbers were higher than ever. With the Black Friday shoppers already filling the stores this morning it looks like Santa is doing his part at least in the retail space.
My plan today is to monitor current positions and avoid the temptation of adding new risk ahead the weekend. Volume will likely be extremely light and price action choppy which makes the risk greater than the potential reward in my opinion. As a result, I intend to extend my holiday as will most other traders. If you do decide to trade today, I would suggest keeping in it small and remember that Cyber Monday often is a very last luster day as well so plan your risk accordingly.
Trade Wisely,
Doug
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Negative Territory
Another nasty day of selling in the tech sector, breaking below Octobers low, and lead the overall market into negative territory for the year. On the positive side the DIA, SPY, and IWM managed to hold at the support of Octobers low, but there is so much technical damage in the charts its difficult to call that victory. Both the QQQ and the SPY are at risk of joining the IWM with their 50-day averages crossing below the 200-day averages in the very near future. The so-called death cross.
Yesterday before the market had even closed there were traders predicting this is the bottom. Really? Yes, this could be a bottom, and this morning we are getting a nice oversold bounce but consider the fact it may be just a resting point before resuming the downtrend. See the price action for what it is not for what you want it to be! Gamble and you may win, but you have an equal chance of just providing liquidity. Remember volume is likely to decline sharply after the morning rush so plans your risk into the holiday carefully! I wish you all the very best and Happy Thanksgiving.
On the Calendar
On the Earnings Calendar, we have less than 40 companies reporting earnings as we head into the holiday. Notable reports today are ADSK, BILI, BJ, BZUN, CPRT, DE, FL, GPS, KEYS, SE.
Action Plan
After yesterdays nasty gap down and selloff, the indices are once again in negative territory for the year. Now the question is will the October lows hold as the price support for the DIA, SPY, and IWM? The QQQ’s yesterday broke support creating yet another layer of resistance as the tech sector continues to slide lower. This morning futures are suggesting a bounce this morning, and I’m already seeing traders trying to predict that this is the bottom.
After sliding 1000 points in just two days, it might be wise to consider that this mornings rally is merely a short-term oversold rally! Sure you could gamble and win but its still a straight up gamble nothing more! We have a very busy economic calendar this morning and some important earnings reports, but after the morning rush volume is likely to drop quickly as traders head out for their holiday plans. I want to wish every one of you a very Happy Thanksgiving!
Trade Wisely,
Doug
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Gap Spinning Top Doji
Yesterday we saw the SPY gap down and closed with a Spinning Top Doji. I don’t subscribe to the idea of a Doji being a buy signal as many do, I do believe the Doji represents indecision, a time for rest, re-think direction. $270.60 is about 50% of the recent low and recent high making it an important horizontal line to have on a chart. Sellers are still in control and can be easily seen by adding a downtrend line to the tops of price action. It has been my experience more money can be made by trading with the trend, not against the trend and to have patience when you think the trend is turning.
Thanksgiving Week Trade Ideas
With this being a holiday week low market volume, Thursday market closed and Friday a half day I have decided to suspend any new trade ideas until Monday. We will post trade ideas as they appear on LTA-Live Trading Alerts Real Time Market Scanner in the trading room.
_______________________________________________________
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Rick has dialed them in for max performance, and he 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.
Free YouTube Education • Subscription Plans • Private 2-Hour Coaching
YouTube Videos
Trading at the Beach • How to set up the T-Line Regression Lines • MetaStock Automated • Trading the T-Line Trap • Shorting the Blue Ice Pattern
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
QQQ
Yesterday as I evaluated the index charts I mentioned my biggest concern was the vulnerability of the QQQ chart and its ability to drag the market lower. Unfortunately, with the WSJ reporting fresh concerns about FB leadership and AAPL cutting production of its new iPhone’s, the QQQ’s broke support as the tech index tumbled 3.25%.
Asian markets follow the US lower overnight, and European markets are lower across the board this morning. As a result, US Futures indicate a substantial gap down with the QQQ set to test Octobers low at the open. As the holiday approaches volumes are very likely to decline after Wednesday’s open so plan your risk carefully and remember cash is a position!
On the Calendar
On the Earnings Calendar, we nearly 60 companies reporting earnings today. Notables include A, ADI, BBY, BECN, CPB, HRL, INTU, JEC, KSS, LB, LOW, MDT, NUAN, PSTG, ROST, SFL, TGT, TJX, URBN.
Action Plan
My concern about the QQQ chart became a reality yesterday with new that AAPL has slashed production of its new iPhone’s and more concerns about FB leadership surfaced. The NASDAQ broke support sliding 3.25% dragging the rest of the market lower as it declined. Now a test of the October low and possibly lower seems inevitable for the QQQ. Currently, the US Futures indicate sharp declines at the open as the technical damage in the charts continues to grow.
Historically the influence of Santa should begin, but those eight little reindeer have to battle a tremendous headwind this year. Asian markets were sharply lower overnight, and currently European are down across the board. As bearish as all that sounds be careful not to chase short positions near support with a gap down open. Wait to make sure there are follow-through sellers supporting the gap. At this time the VIX is indicating fear, but if the market breaks to new lows, we will have to watch for signs of panic selling. Keep in mind volume will likely decrease substantially on Wednesday so plan your risk carefully as we head into the holiday.
Trade Wisely,
Doug
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