VRS Setup and Trade Plan

October 25, 2018 by Ed Carter

Today’s Featured Trade Idea is VRS short.

Members can join us in Trading Room #1 as Rick reviews this setup and other Trade-Ideas at 9:10am Eastern. For now, here are my own analysis and a potential trade plan made using our Trader Vision 20/20 software.

VRS has formed a Head & Shoulders pattern, coupled with a Blue Ice Failure pattern and a Dreaded-h pattern. It has broken (or is testing) the last Support level before a large void down to the $22.45 area.

I will look for a short entry on follow-through with a substantial Stop and a single target (off daily and weekly charts).

Please consider the volatile market with big candles and also earnings. Trading at all at such times is a very risky proposition.

With at least 3 weeks until earnings and one bullish to 5 bearish conditions, VRS a nice chart setup. However, keep in mind the very volatile market and the risk that earnings throws the market the other direction.

TV20/20 tells us this plan offers a nice 3.27:1 Reward/Risk ($605/$185). That would equate to a 21.23% gain. However, it requires a bit more risk to stop-out than I’d prefer…and the market has been very volatile. Pre-markets are also indicating we’ll gap higher and there are many earnings out before, during and after the session. Caution is the word of the day.

Having this knowledge before a trade is even entered makes it much easier to control emotions and maintain discipline.

Below is my markup of the chart and the trade plan as laid out by Trader Vision 20/20. As a bonus, if you click the green button below, you’ll be able to watch a video of the chart markup and trade planning process.

The VRS Trade Setup – As of 10-24-18

The Trade Plan

Note how Trader Vision 20/20 does so much of the work for you. Knowing the ratio of Bullish Conditions to Bearish ones as well as the overall risk of the position size, the risk to Stop out and the Reward possible at each Target price can help a great deal with controlling our emotions. Knowing the dollar impact of every scenario ahead of time, allows us to make calm decisions during the trade. It really takes the pressure off. No guesswork. No surprises. No emotional roller coaster.

To see a short video of this trade’s chart markup and trade planning, click the button below.

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Testimonial

Trader Vision immediately simplified the process…immediately it provided that information and guidance to me. I knew what I would risk for how much reward, I began taking trades off at the 1st target, 2nd target, I was no longer holding all my trades for the homerun. I also began implementing the stop losses if and when they were reached, not just hoping the stock would recover. It then became easier to see what patterns were working for me and which were not. It provided a much more relaxed and stress-free environment. –Joan G

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Investing and Trading involve significant financial risk and are not suitable for everyone. Ed Carter is not a licensed financial adviser nor does he offer trade recommendations or investment advice to anyone. No communication from Hit and Run Candlesticks Inc. is to be considered financial or trading advice. All information is intended for Educational Purposes Only. Terms of Service.

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Capitulation

October 25, 2018 by Doug Campbell

Capitulation

The news-driven selloff seems to have finally reached a capitulation point yesterday. Sadly those that sold yesterday afternoon had also to suffer the indignity of seeing the futures bounce strongly almost immediately after the closing bell. Although we should expect volatility to remain very high with very fast and challenging price action, I think we have reached the point where institutions and value buyers will begin to support current prices.

Of course, earnings are the big unknown and if we see some of the big techs disappoint the market, the bears could easily maintain control. With the VIX closing above a 25 handle, any major disappointment in earnings could evolve from fear into outright panic. Consequently, the price action will most likely be very challenging and not a place for those faint of heart. Extreme intraday whips are possible so plan your risk very carefully.

On the Calendar

We begin Wednesday with three potential market-moving reports at 8:30 AM Eastern. First, Durable Goods Orders expects September to decline by 1.5 percent after surging 4.4 percent in August. International Trade in Goods sees the deficit narrowing to 74.7 billion vs. 75.5 billion in August. The Weekly Jobless Claims are expected to remain near historic lows but rising slightly to 212,000 this week. After that Retail Inventories and Wholesale Inventories @ 8:30 AM, Pending Home Sales Index @ 10:00 AM, Natural Gas Report @ 10:30 AM, Kansas City Fed Manufacturing Index, and 2-Bond Announcements @ 11:00 AM, a Fed Speaker @ 12:15 PM, a Bond Auction at 1:00 PM, the Fed Balance Sheet and Money Supply at 4:30 PM, and a Fed Speaker to finally close the calendar day at 7:00 PM.

There are far too many notable companies to list this morning. We have 339 companies reporting today on the Economic Calendar including several big techs that typically move the market. Make double sure your checking current holdings for earnings.

Action Plan

Yesterday I mentioned with T2122 indicating an oversold condition that I was favoring a bounce for Wednesday. However, as the news rolled out about explosive devices sent through the mail, the market has other plans. It’s unfortunate that many traders were likely squeezed out and then saw the futures almost immediately rebound after the bell.

Looking over the internal damage, I believe we have finally reached that critical capitulation point where we will see institutional and value buyers begin to support current prices. Volatility will likely remain very high and with more than 300 companies reporting today very fast price action will make it very challenging. Keep in mind that if this is the market low at some time in the future, it is very likely to be retested. Of course, if some of the big tech names reporting disappoint today, the bears could easily push on lower. Plan your risk very carefully and the weekend approaches.

Trade Wisely,

Doug

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10-23-18 eLearning

October 24, 2018 by Ed Carter

Can You Really Make

Consistent Profit in Stocks?

In this video, Doug Campbell talks about the Volatility Stop as a tool for high-probability trading and consistent profits trading with the trend. This webinar is a must see!

1 hour 17 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

Whiplash

October 24, 2018 by Doug Campbell

Whiplash

Yesterday’s wild price fluctuations may have left many traders with a nasty case of whiplash. Unfortunately, it looks like the volatility is here to stay and with more than 200 companies reporting earnings today and more than 300 tomorrow, anything is possible.

Looking at the market internally I believe, and short-term oversold condition currently exists. However, with the likelihood of big morning gaps and nasty intraday whipsaws, profiting from this condition will be a very challenging and high-risk endeavor. Just because the market is open is not a good reason to put capital at risk. Only trade when you believe you have an edge and feel you can handle the emotional effects of high volatility. Remember cash is a position and there is no shame in protecting your capital in times like this.

On the Calendar

The Economic starts early today with the MBA Mortgage Applications at 7:00 AM Eastern. The Housing Price Index comes out @ 9:00 AM and then the PMI Composite Flash at 9:45 AM. The New Home Sales report expects to hold steady with an annualized rate of 625,000 in September vs. 629,000 in August and is the most likely report to move the market today. At 10:30 AM is the Petroleum Status Report which is also potentially market-moving however not forecast by consensus. After that, we have a Fed Speaker @ 11:30 AM, a bond auction @ 11:30 AM, a Fed Speaker @ 12:30 PM, a bond auction @ 1:00 PM, another Fed Speaker, and the Beige Book @ 2:00 PM, finally closing the calendar day at 7:00 PM with you guessed it; another Fed Speaker.

On the Earnings Calendar, we have a very busy day with 227 companies stepping up to report. Some of the notables are: ALXN, AMP, APH, BKU, BPOP, BSX, BXMT, CB, CHKP, CNI, COF, CSL, DTE, EQR, EW, FCX, GD, GRA, HA, HIW, HLT, IR, IRBT, ITW, JNPR, LH, MANH, NAVI, NDAQ, NSC, NYCB, OC, PB, QSR, RES, RHI, ROIC, ROL, RRC, SEIC, SIX, SMPL, STL, STM, T, TER, TMO, TPH, TRVG, TSS, TUP, TXN, UPS, VAR, WRB

Action Plan

After sinking more than the 500 points from Monday’s low, the Dow bulls managed to recover a good deal of its losses closing down just 125 points on the day. All four of the major indexes made substantial recoveries, but unfortunately, some of those gains will be swept aside with the futures currently suggesting a gap down of more than 100 Dow points at the open. As I mentioned in yesterdays note, expect lots of volatility, and so far the had delivered exactly that!

With more than 200 companies reporting earnings today and VIX holding above a 20 handle we can expect the wild price action to continue. With daily triple-digit market gaps and large intraday whipsaws maintaining an edge for the swing trader is near to impossible. If you do trade, I highly suggest smaller than normal positions to help reduce risk. I also think it’s wise to take profits quickly because a market gap and instantly turn winners into losers. Internally the market appears to be in a short-term oversold condition, but as we experienced yesterday, earnings can easily keep the bears engaged.

Trade Wisely,

Doug

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Caution

October 23, 2018 by Doug Campbell

Caution

Caution Lately, I repeatedly mentioned the necessity of caution with the current market condition. It’s a message that traders never like to hear, but that doesn’t make it any less true. Currently, the futures are pointing to a gap down on nearly 400 points. A brutal reminder that the market will punish those trading a bias rather than heeding the warnings in the price action of the chart.

Obviously, volatility will be extremely high this morning. Expect very fast price action this morning with huge intraday whipsaws. Early panic could easily lead to additional selling this morning. Don’t chase this gap down short and don’t assume that buying this dip will be a profitable gamble. Let’s hope cooler heads prevail, but this kind of massive technical damage will likely take a long time to repair.

On the Calendar

There are no expected market-moving events on the Tuesday economic calendar. We have the Redbook@ 8:55 AM, Fed Speaker at 9:30 AM, Richmond Fed Mfg. Index at 10:00 AM, three Bond events between 11:30 AM and 1:00 PM, with four more Fed Speakers @ 1:30 PM, 2:15 PM, 615 PM and at 8:00 PM to close the calendar day.

On the Earnings Calendar, there are 139 companies reporting earnings today. I highly recommend that you check all current and proposed positions against the earnings calendar. With the current high volatility of the market failing to do so could prove to be an expensive lesson.

Action Plan

Last Friday I warned of a possible pop and drop. Yesterday I suggested the same possibility and to watch for very high volatility. I have intentionally used the phrase “be careful” several times in the morning videos when going over the index charts pointing out the potential stumbling blocks. Yesterday I received criticism for doing so and was accused of trying to politically correct. I’m not sure how my expression of caution is considered politically correct, but my read of the price action seems to have been correct.

I’m writing this not because my feeling were hurt or that I’m angry about the criticism. I bring it up because it’s a lesson on bias, and how that effect a trader. We may not like what the price action is telling us, but that doesn’t make it any less accurate. Every trader has the choice to move with the market or fight it. It’s been my experience that only one of those choices allows you to say in the game and grow your account over the long-term. With the futures suggesting nearly a 400 point gap down today, I suspect those that choose to fight the market will once again have to suffer the consequences of defiance.

Trade Wisely,

Doug

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Blue Ice Fail Setup Chart Pattern Free YouTube Educational Channel

October 23, 2018 by Rick Saddler

Blue Ice Fail Setup Chart Pattern

HCA is presenting us with a Blue Ice Failure Pattern and the Dredded Bearish “h” pattern. HCA has been trending up and started to show signs of fatigue early October. The early October Evening Star pushed the price to the 50-SMA where tested and even tried to become bullish again; the sellers do not see that way. Price has closed below the 50-SMA. Short on price action weakness will be my plan.

YouTube Education

Today’s Featured YouTube Video is Shorting The Blue Ice Pattern; Please don’t forget to subscribe to me FREE YouTube Channel

Past performance is not indicative of future returns

Good Trading, Rick, and Trading Team

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SPY • Test the October Lows

Waking up to a 300 point drop in the DOW is like waking and stepping in something special your cat left you. Well unless your short and have been following basic trend rules. It looks like we are in for a test of the October 11 lows, so the big question is will the market find support and buyers? And that’s why we follow the trend and stay with the trend until the trend has changed. With earnings being so-so and the fear of the FED being a little overzealous is causing the market to be hangry. Micromanaging will bite you in the butt more often than not, bottom picking is just embarrassing and the following the trend is your friend.

YouTube Videos – Free Education On Demand

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

****VXX

The VXX will pop over the 200-SMA today, for those of us in this trade remember you profiting rules.

Testimonial

This is not your usual service that sends out a ton of stock recommendations, and then cherry picks the winners to show you how great they are. Hit and Run Candlesticks and Right Way Options are truly educational services. They taught me how to trade not what to trade. The entire team: Rick, Doug, Steve, and Ed are there to help and answer your questions. They are awesome. They cut years off my learning curve. And it’s a team effort. Everyone in the room (all the members) are there to help with invaluable insights and advice. The only service you will ever need. Thanks to all the team for how you have helped me and for all you do. –Jonathan Bolnick

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Past performance is not indicative of future returns

Investing and Trading involve significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, Right Way Option, Trader Vision 2020, Top Gun Futures or Rick Saddler, Doug Campbell, Ed Carter, Steve Risner is to be considered financial or trading advice. All information is intended for Educational Purposes Only. Terms of Service.

Rick Saddler, Doug Campbell, Ed Carter, Steve Risner is not a licensed financial adviser nor do they offer trade recommendations or advice to anyone.

10-21-18 eLearning Sunday Prep for the Week Ahead

October 22, 2018 by Ed Carter

Turbulent Markets and the T-line

In this video, Rick Saddler talks about the turbulent markets we are experiencing, all the earnings reports ahead for this week and how the T-line helps him filter out the noise.

1 hour 14 minutes

Turbulent Price Action

October 22, 2018 by Doug Campbell

Turbulent Price Action

Put your tray table in the upright and locked position, fasten your seat-belts low and tight across your lap because traders should expect some turbulent price action this week. With nearly 900 companies stepping up to report in the midst of a market correction could be volatility’s definition of the perfect storm. Expect very fast price action and daily market gaps as just a couple of the challenges traders will face.

Asian and European markets are bullish thus the US Futures are pointing to a gap up open this morning. Is this confirmation of higher lows in the indexes or a prelude to another nasty whipsaw? Only time will tell but be careful chasing the morning gap. Wait for proof that buyers step in supporting the gap and as always have a plan to manage the risk before you enter. If you don’t feel you have an edge, then protect your capital and don’t trade. Trading is a marathon, not a sprint.

On the Calendar

We start Monday with a light Economic Calendar and no expected market-morning reports throughout the day. The Chicago Fed National Activity Index kicks off the day at @ 8:30 AM Eastern. We have two Bill Announcements @ 11:00 AM and two Bill Auctions at 11:30 AM to end the calendar day.

Traders will need to stay very alert and flexible this week as the 4^th quarter earnings season kicks into high gear with nearly 900 companies reporting. Today there are 77 expected to fess up to their result today with the most notable being CADE, HAL, HAS, IQV, KMB, ONB, PETS, PHG, PII, SALT, TCF.

Action Plan

Market correction jitters coupled with nearly 900 earnings reports this week will likely create a very challenging price action this week. Morning gaps, fast price action, high volatility, head fakes, whipsaw, and earnings reports are just a few of the issues traders may have to deal with this week. While very quick day traders may find this kind of market very much their liking, swing traders may find it very difficult to find or maintain an edge.

Asian markets closed sharply higher across the board last night with Shanghai rallying over 4 percent. European markets are also decidedly bullish this morning, up nearly half a percent. As a result, the current US Futures are suggesting a gap up of more than 75 points Dow points at the open. Although it’s encouraging the indexes could be putting a higher low we also must give respect to the price resistance that rejected last Tuesdays big rally. Anything is possible so buckle up everyone it could be an exciting yet very bumpy ride!

Trade Wisely,

Doug

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OKTA Setup and Trade Plan

October 22, 2018 by Ed Carter

Today’s Featured Trade Idea is OKTA.

OKTA has been in a bearish trend for a month and a half. It broke the 50sma on a strong down move rallied back and failed the 50sma again on an Evening Star signal. This is a classic “Ice Hole” or “Blue Ice Failure.” The next expected target would be the 200sma below. It is also forming a “Dreaded-h” pattern that is near b/o.

I will look to Enter Short just below the next Support level and use a Stop protected by a couple resistance levels. The targets are defined by S/R levels from the Weekly chart.

Trader Vision shows us that we have plenty of time until the next earnings report. It also shows us the setup has 2 bullish and 4 Bearish conditions (and that Evening Star signal on Thursday).

TV20/20 tells us this plan offers 2:1 Reward/Risk at the 1st Target and that we do not even need to reach Target #1 to achieve our Trade Goal. That said, it requires a very large position size for this account to do so. If we can sell half at Target #1 and the rest at the 2nd Target, we’d make a tidy 10.6% for almost a 2:1 Reward/Risk ($585/$235).

Having this knowledge before a trade is even entered makes it much easier to control emotions and maintain discipline.

The OKTA Trade Setup – As of 10-19-18

The Trade Plan

To see a short video of this trade’s chart markup and trade planning, click the button below.

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Put the power to Trader Vision 20/20 to work for you…

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