Who Loves to Eat?
ZOES – Who loves to eat? We all do silly traders. The RBB strategy will work perfectly for the ZOES chart. ZOES has rallied from a Bull Kicker to the Dotted Deuce and pulled back to create a PBO J-Hook continuation pattern. Note gap above the 200-SMA to about $15.90.
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Good Trading – Hit and Run Candlesticks
► Members’ Trade Idea Update (ZAGG)
On October 4 we shared and went over the technical properties of ZAGG, today the profits would be about 38% or $605.00, with 100 shares.
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► Eyes On The Market
The SPY remains above the T-Line trend and the $257.30 support line. The morning futures are suggesting a higher open. Premarket price has challenged the recent high. The Bulls are in charge as long as they maintain the trend. Pullbacks to support are welcome with evidence of buyers coming back in. The 3,4,5 day charts look like consolidation above the T-Line.
Rick’s trade ideas for the day – MEMBERS ONLY
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Investing and Trading involves 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.
Defend Price Support
It was nice to see the Bulls step up and defend price support levels yesterday. Futures are suggesting the first directional follow-through in the Dow for the last 5-days of trading. Even the Dow Transports, (IYT) held support suggesting at least a short-term rally could be in the cards. The VIX which was stubbornly clinging to price support level finally gave way to bullishness sinking sharply by days end. Let’s keep in mind that even though the futures are pointing to a nice gap up that Thanksgiving is just 2-days away. Volumes could begin to drop off quickly at any time. Even the best of trade signals can and will stall if volume dries up so keep that in mind as you plan.
On the Calendar
On today’s Economic Calendar we have the very important Existing Home Sales at 10:00 AM Eastern. Home sales rose slightly by 0.7% in September to a 5.390 Annualized rate. Forecasters are suggesting a solid growth in home sales with an expected October print of 5.440 million. There are a couple of mid-day bound auctions, but then at 6 PM, Janet Yellen Speaks.
On the Earnings Calendar, we have just short of 60 companies reporting earnings today. LOW has already reported better than expected results this morning. Others include CPB, JEC, KIRK, MBT before the bell and CPRT, CRM, GES, DRYS and GME after the bell.
Action Plan
The market opened a bullish yesterday but a bit on pins and needles with the question; Will the Dow hold at support? The answer came back as yes and now requires a bullish follow-through to confirm. Both the SPY and QQQ’s turned in a lackluster performance yesterday while the IWM continued to show life rallying back toward resistance. As I write the Futures markets are bullish across the board suggesting might actually see the second day in a row in the same direction. Something we have been unable to do for the last five trading days!
Of course, I will continue to manage current positions, but as we move toward the holiday, I will be watching closely for reasons to take profits and reduce risk. I will also continue to look for new entries and building the watchlists of qualified stocks. Be prepared for the possibility that volumes could begin to drop off quickly as Thanksgiving approaches. Great by signals produced in the morning rush can easily die on the vine as volumes drop into the afternoon. Remember it’s the big institutions that move the market. As their traders pack up for holiday vacations volumes can drop quickly, and the price action becomes choppy, boring and virtually untradeable. Keep that in mind as you prepare plans for the remainder of the week.
Trade Wisely,
Doug
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Trade Alert
CSCO is looking pretty strong this morning. I would not be surprised to see a little more consolidation but I would also not be surprised to see it move higher.
I want to take a long term trade eventually but looking at this I get the impression of shorter swing trade. If your interested consider the JAN18 35 strike calls. If you do decided to trade it I would suggest keeping it small because it is very early in this pattern.
There will be no entry video.
Remember all trade ideas are for your evaluation and consideration. Only trade if it fits your risk tolerance and trade rules.
Breakout Over The 200-SMA
CERS – Came from an (RBB) Rounded Bottom Breakout closing over the 200-SMA. After eight days of consolidation, CERS broke out again after a PBO Bullish Engulf from the T-Line. Take a look at the 2,3,4,5 day charts, all set up in an (RBB) Rounded Bottom Breakout pattern. Price could be looking at the $4.70 resistance level. Could be a 20-25% trade properly managed and planned.
Good Trading – Hit and Run Candlesticks
► Members’ Trade Idea Update (SQ)
That crazy SQ popped another 5% Friday! With the SQ trade Idea, the profits are now about 71% or about $1842.00, with 100 shares.
If you are interested in learning how to end the week with a profit that could change your life simply start a membership and learn what we have to share. – Yes I want the winning trades
► Eyes On The Market
Friday the SPY printed an inside day Harami. The key for the Bulls is to fight the Bears from trying to pull them back down below the recent low. One of the most obvious patterns I see in the SPY chart is the Lower High and Lower Low pattern. This patter is a Bearish pattern, the bulls can reverse the pattern, but they will need to follow through above $259.00
Rick’s trade ideas for the day – MEMBERS ONLY
30-Day Trial • Monthly • Quarterly • Semi-Annual • Annual
Investing and Trading involves 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.
Deadlocked
Typically the week of Black-Friday the retail stocks put the markets higher in anticipation of the holiday spending frenzy. A quick look at the ETF, RTH on a weekly and monthly chart you will a very nice breakout to new has occurred suggesting a rally is possible. However, a quick look at the indexes and we see up-trends but also a tightly range-bound price action in the DIA, SPY and the QQQs. The Bulls and Bears appear deadlocked in a rising volatility environment. Because of that, I suggest a little caution is in order. If the DIA breaks down through price support, the Bears could gain the advantage. On the other hand, if the QQQ can breakout to new record highs the Bulls could gain the edge. We don’t want to bet caught in this struggle because very quick reversals can happen leaving us staring at large losses. Focus on price action! Clues to which side gains the advantage will always appear there first.
On the Calendar
On the Economic Calendar today we have a very light day. First Leading Indicators at 10:00 AM and then bond auctions and announcements. None of which would be expected to move the market. Keep in mind this is also a Holiday Week which could volumes begin to decline by mid-week making for choppy price action.
On the Earnings Calendar, we have just over 50 companies reporting today. URBN will report this morning, and INTU and PANW are among the afternoon reports.
Action Plan
During the evening futures where sliding south at a pretty quick rate. At my last look before going to bed, the Dow Futures were down nearly 60 points. About 2 AM Futures began to turn around clawing their way all the back to even. As of now, futures are mixed and almost even with Friday’s close. Today the DIA is my biggest concern holding just above price support with a bearish price pattern. Thursday’s big rally now appears on the DIA as a lower high. The SPY and the QQQ’s are in better shape having left behind and inside day. Last week I wrote a lot about the importance of follow-through. As of now, last Thursday’s rally has not only not been unable to follow-through, but the DIA completely reversed on Friday.
As a result, the market is between the preverbal rock and a hard place. A follow-through down in the DIA will test and could even break support possibility emboldening the Bears. All the major averages are currently below resistance levels with the QQQ having the best chance of breaking to new highs. If by chance the QQQ’s can muster the energy to break out the Bulls might be emboldened to push the SPY and the DIA higher. As the indexes are in a pretty tight price range, there is not a lot of room for error. Remain flexible and focused on price action for clues.
Trade Wisley,
Doug
Copy paste this link into a browser to watch the video. https://youtu.be/-Uk1juPZC6Q
Follow-through is Required
The relief rally was just what the doctor ordered. Trader everywhere got that familiar warm and fuzzy feeling that the Bulls are back in control. While it’s true, the Bulls produced wonderful reversal patterns in the index charts let’s not forget Follow-through is Required. One day does not make a trend! Please understand I’m not suggesting bearishness of any kind. I’m merely pointing out how important it is to see the price action as it is, not as we would like it to be. The indexes are at or near all-time-highs which means resistance requires consideration in your planning. Go Bulls!
On the Calendar
The Friday Economic Calendar kicks off at 8:30 AM with the potential market-moving Housing Starts report. The September housing starts number fell sharply to 1.127 million. Multi-family units were particularly weak while single-family units gain ground. The October consensus expects a 1.190 million rate for starts with permits rising to 1.250 million. After that, we have a couple of non-market-moving reports and a Fed Speakers at 12:45 PM.
On the Earnings Calendar, we have about 20 companies reporting today. Retail seems to be the theme today with BKE, ANF, and FL. DRYS is another notable but be careful this one can be really wild.
Action Plan
Yesterday’s short squeeze delivered nice reversal patterns in the all of the four major indexes. The QQQ’s even managed to print new record highs during the day but settled back down to close at the exact high set on 11/8/17. Amazing! So, now what? As great as that move was we have to remember that one day does make a trend! That means it’s going to be very important for the market to show us some follow-through bullish price action. The DIA, and the SPY, still have price resistance above and the QQQ’s closed exactly at the resistance high. Although the IWM rallied strongly yesterday, it still has a lot of heavy lifting to do before we will see a bullish trend in the small-caps. So, come on Bulls dig in and push hard.
As you know on Friday’s I, tend to focus on taking profits rather than adding new risk ahead of the weekend. However, I will be building a shopping list for next week. Of course, I never want to say never so if a great opportunity presents itself I will be more than happy to exploit it for profits. I wish you all a fantastic weekend.
Trade Wisely,
Doug
Watch the Morning Video Here: https://youtu.be/FLpNCuV4qvI
