Price is King
After two months of messy price action, the storm clouds are giving way to blue skies, but it may take a little longer for smooth sailing to return. The DIA continues to lag significantly behind the other indexes as it continues to struggle with its 50-day average as resistance. The QQQ is leading the way, and the SPY and IWM are not far behind dragging the DIA along like a boat anchor. Clearly, the other indexes can continue to move higher without the DIA, but the work will be harder until it can carry its weight rather than being dragged. Overall the bulls are in control, and many stocks have resumed their trends but don’t be surprised if the daily index price action starts to grind or even slips into consolidation. There can be great trading in this environment, but we may have to exercise some patience and plan a little extra holding time for options trades.
On the Calendar
Only one big report today’s Economic Calendar but the Consumer Price Index is one that can move the market. The report comes out at 8:30 AM Eastern and will be watched closely for pricing pressures which, of course, would signal inflation. Consensus for the headline CPI is for a monthly gain of 0.2% and a yearly rate of 2.2% up just one-tenth. Remove food and energy, and consensus expects a slight rise to 1.9% A couple of smaller reports from Small Business Optimism, Redbook, and a couple of bond events round out the day.
On the Earnings Calendar just short of 110 companies are expected to report earnings today.
Action Plan
An interesting mix of price action in the indexes yesterday as the QQQ sailed to new records while the DIA sold off below the 50-day average once again. The SPY saw only modest profit taking while the IWM squeezed out its 7th day up in the current rally. All in all a good showing by the bulls considering the size of last Friday’s rally. The VIX managed a small rally but by the close remained under resistance and the 50-day average as market fears seem to be calming down.
As I write this Dow Futures are pointing to about a 70 point gap up which would recover about half of yesterdays losses, but a lot could still change, and earnings as economic news come out. The T2122 4 week new high / low ratio is suggesting the current rally is getting a bit long in the tooth, and a pullback or consolidation may be just around the corner. There are a lot of very nice looking charts but be careful on to chase. Remember we want to buy stocks at or near price support. The bulls are in control so any consolidation or pullback that holds support could set up great trade entries.
Trade Wisely,
Doug
[button_2 color=”green” align=”center” href=”https://youtu.be/OwR7YUK_Uvk”]Morning Market Prep Video[/button_2]
T-Line PBO Bullish Engulf
EVH ended yesterday with a Bullish Engulf on the T-Line and is in our Rounded Bottom Breakout Pattern. After the bullish engulf price had bullish follow through. After running into sellers about $16.50 price pulled back creating a PBO set up. If we decide to trade EVH, we will use our RBB rules. With the help of Fibonacci Lines, I will be setting up my plan for about a 20% trade.
We will discuss the trade details with our trade plan in our Members Morning Prep starting at 9:10 EST this morning. members morning briefing
►Recently Closed Trades
WTW 21.9% • VIPS 118% • VXX 375% • TWTR 180% • QQQ 179% • QQQ 28% • TWTR 54% • OCN 39% • FEYE 28% • TWTR 50%
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►SPY Up-Date
Today will be the 6th day of a Bullish T-Line Run as the SPY shows it’s strength after a pattern breakout. Yesterday’s close is what we call a Doji continuation pattern which should lead us to $281.55. When looking at your SPY chart take a look at the weekly, you can see how price has formed a bullish engulf and how the 34-EMA has started to tend again. A close below $277.90 would likely lead to a test of the 50-SMA.
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
►The VXX short-term futures
VXX took a nose dive and looks to be headed to the 50-SMA for now (no change form yesterdays comment)
►Rick’s Swing Trade Ideas Reserved for Subscribing Members
30-Day Trial • Monthly • Quarterly • Semi-Annual • Annual
To learn more about our trading tools join us in the trading room or consider Private Coaching.
Investing and Trading involve significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc. is financial or trading advice. All information is intended for Educational Purposes Only. Terms of Service.
Rick Saddler is not a licensed financial adviser nor does he offer trade recommendations or advice to anyone except for the trading desk of Hit and Run Candlesticks Inc.
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Predicting
This weekend I received an email suggesting that I’m completely wrong and that all trading and all traders are predicting. I wholeheartedly disagree. Gamblers are predictors that continually lose money because they focus on the big win rather than the business of trading. To be successful as a trader over the long haul, you have to think like the CEO of a business. A CEO makes business decisions only after careful risk analysis and planning that puts the odds of winning in their favor. In other words, a good trader thinks like the House working every day to maintain a statistical advantage where the potential rewards are always greater than the risk. Be the House! Make business decisions and leave the predicting to the amateurs.
On the Calendar
W have a busy week on the Economic Calendar, but we kick it off with a light Monday. We have five bond events throughout the day follow only by the Treasury Budget at 2:00 PM. The consensus is calling for a monthly deficit of $216.0 billion because of tax reform.
On the Earnings Calendar, this should be the last big week of the quarter with more than 500 companies reports. Today we will hear from about 120. Remember checking earnings reports against current holdings each day as part of your daily preparation is an important habit to develop.
Action Plan
Friday was a rip-roaring day as the bulls gathered in a show of force and firmly re-establishing their control of the market. The QQQ set a new record high to begin the day and just kept right on pushing higher through the close. The SPY not only drove through the downtrend line but also managed to close above the February resistance. The IWM tested the resistance of record highs, and even the DIA which has been lagging behind found the energy to break through its 50-day average.
As I write this, the Dow Futures are pointing to a 100 point gap up to punctuate Friday’s bull run. Even though the bulls appear are large and in the pre-market be careful not to get caught up in the exuberance by chasing. To marks, the 7th day of a straight up QQQ’s rally and with today’s gap up the Dow will have improved by nearly 900 points in 4 days! A little rest or even some profit-taking is not out the question. In-fact a consolidation or slight pullback to test supports would be a very normal and healthy price action. Your watchlist of trending stocks should now contain a target rich environment for quality setups assuming the bull maintain control.
Trade Wisely,
Doug
[button_2 color=”green” align=”center” href=”https://youtu.be/gImrIbHsnEU”]Morning Market Prep Video[/button_2]
Bullish Trend Since Later December
CVEO has a bullish trend since late December while constructing a good bottom. The trending construction on the weekly chart has put together clues like a Bullish “W” pattern, Bullish Cradle pattern, and a Bullish Inverted Head and shoulder. Recently the Bullish Engulf Double Bottom found and created support.
We do not and have never recommended a stock to trade. We post trade ideas that we have on our watchlist. We may or may not trade them. Not all trade ideas are traded and not all trade ideas work in our favor. Proper trading education is a must without it the probability of success is zip.
We will discuss the trade details with our trade plan in our Members Morning Prep starting at 9:10 EST this morning. members morning briefing
►Recently closed
WTW 21.9% • VIPS 118% • VXX 375% • TWTR 180% • QQQ 179% • QQQ 28% • TWTR 54% • OCN 39% • FEYE 28% • TWTR 50%
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►SPY Up-Date
The SPY finished the week in a great Bullish position now that price as broke out to the bullish side of the triangle chart pattern. The line the bulls need to defend is $273.00 if this can happen there is a very good probability of challenging the January high. The weekly chart is supporting a Bullish Engulf, remembers followthrough the key and followthrough is not required right away.
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
►The VXX short-term futures
VXX took a nose dive and looks to be headed to the 50-SMA for now
►Rick’s Swing Trade Ideas Reserved for Subscribing Members
30-Day Trial • Monthly • Quarterly • Semi-Annual • Annual
To learn more about our trading tools join us in the trading room or consider Private Coaching. Rick will help coach you to trading success.
Investing and Trading involve significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc. is financial or trading advice. All information is intended for Educational Purposes Only. Terms of Service.
Rick Saddler is not a licensed financial adviser nor does he offer trade recommendations or advice to anyone except for the trading desk of Hit and Run Candlesticks Inc.
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Employment Situation
The 800-pound gorilla in the room today is the Employment Situation report and what it may or may not reveal about inflation. Consensus suggests the unemployment rate will drift lower to just 4% and could point to wage pressures. The SPY by the close of the market yesterday defeated the 50-day average but only by half a point. The Dow continues to lag behind struggling with the 25,000 level and still 390 points below its 50-day average.
Price action the last couple days has been encouraging with the bulls defending against pullbacks. If the Employment Situation report shows inflation is in check, the bulls appear to have the upper hand. Expect fast price action after the open and keep in mind whipsaw are possible due to the overall market volatility.
On the Calendar
We have the biggest report of the week on the Economic Calendar before the market open. The Employment Situation comes out at 8:30 AM may provide clues that will influence the FOMC coming decision on interest rates. According to consensus, February non-farm payrolls are expected slightly higher at 205,00 vs. the 200,000 reading in January. The unemployment rate is expected to tick down to 4.0%, but hourly earnings, rising only by a modest 2% in the month with year-on-year holding at 2.9%. We have one Fed Speaker today that is speaking three times 8:40 AM, 10:45 AM and finally 12:45 AM. There are two other non-market moving reports such as Wholesale Trade at 10:00 AM and the Oil Rig Count at 1:00 PM.
On the Earnings Calendar, we have just 73 companies reporting results today.
Action Plan
Once again it was encouraging to see the bulls hang in there yesterday and not give in to all the hype over trade wars. In fact, if you judge by the market reaction, the President’s plan thus far was a non-event. This morning it’s all about the Employment Situation report. Unfortunately, all we can do as retail swing traders is to deal with the gap up or gap down that it’s capable of producing at the open. As I write this, futures markets are essentially flat as the market waits.
A report that does not display inflationary pressures could move the market higher which the price action seems to favor at the moment. Of course, if inflation is seen raising its ugly head enough to cause an FOMC reaction the market tone could quickly shift bearish. Only time will tell, and all we can do is patiently wait for the open. I wish you all a great day and a fantastic weekend.
Trade Wisely,
Doug
[button_2 color=”green” align=”center” href=”https://youtu.be/UGrhS6yZs6Y”]Morning Market Prep Video[/button_2]
Battle for Control
Yesterday’s defense of support was indeed a very welcome sight. Price action would suggest that the bulls may be gaining the upper hand, but this battle for control will still require a significant effort. Although the QQQ and IWM are above the 50-day average, the SPY and the DIA are still below giving a reason for caution. As this battle for control plays out, keep in mind that the VIX is still indicating significant volatility. It would also be wise to remember that the Employment Situation number Friday morning has the potential to move the market substantially. The market seems to be very sensitive to any hint of inflationary pressures. Friday’s report could provide and important clues to the next FOMC action.
On the Calendar
There is a full Economic Calendar today, but there is only one report that’s likely to move the market. At 8:30 AM the Jobless Claims number came in at a 49-year low last week should rise slightly to 220,000 according to consensus. We will also hear from the Challenger report, Consumer Comfort, Services Survey, Nat. Gas Report, Fed Balance Sheet and Money Supply and several bond events throughout the day.
Today is the biggest day of the week on the Earnings Calendar with 236 companies expected to report. Make sure to check reporting dates on the companies you hold and those you’re considering to purchase.
Action Plan
After gapping sharply lower, Wednesday proved to be a roller coaster ride as the bulls and bears fought for control. By the end of the day, the bulls had the upper hand with the SPY once again testing the 50-day average from below. The QQQ held firmly as the market leader, and in a surprising show of strength the small caps confidently broke resistance levels as well as defeating the downtrend. The Dow is the market laggard still more than 400 points below its 50-day average and 200 below the big round number of 25,000.
Futures this morning are currently suggesting a flat to slightly bullish open with the VIX hovering around a 17 handle. With bulls showing a strong willingness to defend price supports I’m cautiously optimistic that they are gaining the upper hand. However, with the DIA and SPY still below the 50-day and important clues on inflation coming in Friday morning Employment Situation report, anything is possible. Stay focused on price and remain flexible. Don’t buy anything that you are not willing to hold through some volatile swings. Smaller than normal position sizes can be a good way to plan for the additional volatility.
Trade Wisely,
Doug
[button_2 color=”green” align=”center” href=”https://youtu.be/fTQnIdLZE3w”]Morning Market Prep Video[/button_2]
Taking 2 Days Off
Hi everyone, I will be taking Thursday and Friday, March 8, and 9, off for a little vacation. Hit and Run Candlesticks will run as usual thanks to a great team.
I hope every took advantage of the TWTR and FEYE trades we posted!
If you are interested in learning more about combining Fibonacci Lines with your trading… check this link out.
►Event Calendar Stay Informed
►Rick’s Swing Trade Ideas Reserved for Subscribing Members
No members trade ideas for Thursday and Friday
30-Day Trial • Monthly • Quarterly • Semi-Annual • Annual
To learn more about our trading tools join us in the trading room or consider Private Coaching. Rick will help coach you to trading success.
Investing and Trading involve significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc. is financial or trading advice. All information is intended for Educational Purposes Only. Terms of Service.
Rick Saddler is not a licensed financial adviser nor does he offer trade recommendations or advice to anyone except for the trading desk of Hit and Run Candlesticks Inc.
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After two months of messy price action, the storm clouds are giving way to blue skies, but it may take a little longer for smooth sailing to return. The DIA continues to lag significantly behind the other indexes as it continues to struggle with its 50-day average as resistance. The QQQ is leading the way, and the SPY and IWM are not far behind dragging the DIA along like a boat anchor. Clearly, the other indexes can continue to move higher without the DIA, but the work will be harder until it can carry its weight rather than being dragged. Overall the bulls are in control, and many stocks have resumed their trends but don’t be surprised if the daily index price action starts to grind or even slips into consolidation. There can be great trading in this environment, but we may have to exercise some patience and plan a little extra holding time for options trades.
