Over Extended
Yesterday’s idea on BAC worked out very well even gaping up slightly this morning. Remember to manage the trades as you see fit. Some may want to capture the gains of better than 45% while others may wish to hold for the possibility of more.
Today’s idea is on VZ. The stock has rocketed up breaking through resistance but seems to have overshot in the short term. Consider the VZ 15 DEC17 52.5 Put weekly contracts. Consider this as a very short-term hold as VZ settles back toward price support.
Recently Closed Trades
CSCO 17% • BAC 31% • CREE 48% • WMT 245% • NFLX -40% • STX 42% • 2nd CSCO Trade 30%
Today’s Market Prep Note
For those of us that watch price action yesterday left us with more questions than answers. Clearly, bearish candle patterns were left behind, but the majority of the indexes are still in up-trends. Things that make you say Hmm? As of now, only the QQQ is showing technical damage. From the candle patterns, most traders would expect a big increase in fear, but the VIX seemed only to yawn in boredom. There is an abundance of clues to suggest caution but also a sense that anything is still possible. With weighty decisions still to be made in Congress this week expect the market to be very sensitive to the news cycle. Plan your risk carefully and continue to watch for violent price moves in reaction to news events.
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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.
Doug Campbell is not a licensed financial adviser, nor does he offer trade recommendations or advice to anyone except for the trading desk of Right Way Options Inc.
Things that make you say Hmm?
For those of us that watch price action yesterday left us with more questions than answers. Clearly, bearish candle patterns were left behind, but the majority of the indexes are still in up-trends. Things that make you say Hmmm? As of now, only the QQQ is showing technical damage. From the candle patterns, most traders would expect a big increase in fear, but the VIX seemed only to yawn in boredom. There is an abundance of clues to suggest caution but also a sense that anything is still possible. With weighty decisions still to be made in Congress this week expect the market to be very sensitive to the news cycle. Plan your risk carefully and continue to watch for violent price moves in reaction to news events.
On the Calendar
We kick off Tuesday’s Economic Calendar with the International Trade Report at 8:30 AM. Once again the international trade deficit is expected to widen in October. Forecasters see a 47.4 reading vs. 43.5 in September. At 9:45 there is PMI services which is not expected to move the market coming in unchanged at 54.7. Then at 10:00 AM we get the ISM Non-Mfg. Index which posted its highest score of 60.1 in October. Consensus expects this number to remain very strong only slowing to 59.0 in November. A couple of bound auctions will round out the rest of calendar.
On the Earnings Calendar, there are 38 companies reporting quarterly results. Notable are AZO, BMO, and TOL before the bell with PLAY and RH after the bell today.
Action Plan
After opening at new record highs in the DIA, SPY, and IWM profit takers took the gift of the gap and rang the register. Selling off to fill the gap obviously left behind price action candles suggesting a least a tempory top. The QQQ’s gave a half-hearted attempt to show bullishness with a gap up, but this index suffered significant technical damage. Not only did it leave behind a bearish engulfing it also printed a lower high failure.
This morning the Dow Futures are pointing to a gap up while at the same time the Nasdaq Futures suggest a gap down to a new low. Surprisingly with all the selling yesterday day the VIX didn’t register a groundswell of fear as one would have expected. The overall trends in DIA, SPY, and IWM are still up despite the bearish price action signals. So although there are a lot of clues suggesting caution only the QQQ has built a case for bearishness. Personally, I will be taking a wait and see approach without bias as to direction. I continue to expect market sensitivity to the D.C news cycle making violent price moves possible.
Trade Wisely,
Doug
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Consolidation May Be Ending
DISH – The month-long consolidation may be ending with the Bullish Morning Star yesterday. Yesterday’s Morning Start and the month-long consolidation is also above the $49.00 support line. DISH became an (RBB) setup on the 29th and may be ready to take the next step into the $54 plus area.
At 9:10 AM ET. We will talk about the technical properties of DISH with target zones, a couple of logical entries and a protective stop. We will also be showing our trade plan with risk/reward and money expected.
Good Trading – Hit and Run Candlesticks
► Must Read Trade Update (LB)
On October 9, we shared and covered in detail the technical properties of LB in the Trading Room, Yesterday the profits were about 33% or $1400.00, with 100 shares. LB broke out of a Rounded Bottom Breakout strategy using the 200-SMA as support and pushed it’s self-higher.
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► Eyes On The Market
The Bearish Engulf yesterday in the SPY will likely cause a test of the T-Line today or tomorrow. As long as the Bulls can keep the trend intact, they will be ok, but it the bears can close price below $260.75 the bullish trend could be in jeopardy. The Bears found the QQQ’s and pinched them with a Doji Hanging Man with follow through. Price has now closed below the lower T-Line Band and the Volatility Lines. For the QQQ’3 the 50-SMA is looking pretty tasty.
Rick’s trade ideas for the day – MEMBERS ONLY
30-Day Trial • Monthly • Quarterly • Semi-Annual • Annual
Learn how and what we trade: The T-Line • T-Line Bands • Chart Patterns • Support • Resistance • Patterns • Buy Box • Volatility Stops • Price Action • Candlesticks • Profit Zones • Entry Zones • Protective Stops
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.
Bullish Breakout
Last week BAC produced and very nice bullish breakout showing significant strength. BAC has now pulled back leaving a hammer pattern at price support. Should price follow-though showing buyers stepping in at support BAC would be a buying opportunity.
Banks typically do well in a rising interest rate environment. Next week is the FOMC meeting and the market believe there is more than a 90% chance they will raise the rate. The overall market is trending up is currently looking a bit stretched so consider that if you decide to act on this trade idea.
Consider the BAC JAN 28 Calls. Consider scaling out with first target area between $29 an $30. Plan your trade carefully as there will not be follow up management instructions on this free trade idea.
Recently Closed Trades
CSCO 17% • BAC 31% • CREE 48% • WMT 245% • NFLX -40% • STX 42% • 2nd CSCO Trade 30%
Today’s Market Prep Note
With the futures pointing to a 200 point gap up in the Dow on the back of the Tax Reform bill passage, it would seem the market is bulletproof. Even the threat of nuclear war seem to be nothing more than an annoying mosquito easily shooed away. Now the Dow has 25,000 in its cross-hairs and seems to have all the money and energy necessary to drive for that goal. However, I doubt the ascension to this plateau will be a smooth one. Friday’s full reversal intra-day whipsaw may be a clue to fast and whippy price action ahead. Big price action swings could be possible as we move forward making it very challenging for swing traders. The bulls are obviously in control, but Friday’s price actions should serve as a reminder that the bears are still here and they have been waiting to eat for a long time. Plan your risk carefully.
Become a Member Today!
30 Day Trial Monthly 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.
Doug Campbell is not a licensed financial adviser, nor does he offer trade recommendations or advice to anyone except for the trading desk of Right Way Options Inc.
PBO Flag Found A New Friend
CYCC – The Rounded Bottom and the PBO Flag found a new friend, “the Morning Star.” Excellent support with price, the big three moving averages and price support. A little volume kicked in Friday, and after $2.25 there’s a nice little gap that could reward in a good way.
Good Trading – Hit and Run Candlesticks
► Must Read Trade Update (NTNX)
On October 16 we shared and covered in detail the technical properties of NTNX in the Trading Room, Friday the profits were about 35.5% or $945.00, with 100 shares. NTNX has been a T-Line run and continued to make higher highs and higher lows.
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► Eyes On The Market
Can you believe this marker? I saw the DOW up over 200 points. At the close Friday the Bulls had come back strong, and with the TAX Bill this weekend the Bulls must be throwing a party. Today and this week it will be more important than ever to keep an eye on price. We don’t want the price to sneak across some line we don’t want it to. The trend is you, friend; friends do turn on each other on the playground.
Rick’s trade ideas for the day – MEMBERS ONLY
30-Day Trial • Monthly • Quarterly • Semi-Annual • Annual
Learn how and what we trade: The T-Line • T-Line Bands • Support • Resistance • Patterns • Buy Box • Volatility Stops • Price Action • Candlesticks • Profit Zones • Entry Zones • Protective Stops
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.
Bulletproof?
With the futures pointing to a 200 point gap up in the Dow on the back of the Tax Reform bill passage, it would seem the market is bulletproof. Even the threat of nuclear war seem to be nothing more than an annoying mosquito easily shooed away. Now the Dow has 25,000 in its cross-hairs and seems to have all the money and energy necessary to drive for that goal. However, I doubt the ascension to this plateau will be a smooth one. Friday’s full reversal intraday whipsaw may be a clue to fast and whippy price action ahead. Big price action swings could be possible as we move forward making it very challenging for swing traders. The bulls are obviously in control, but Friday’s price actions should serve as a reminder that the bears are still here and they have been waiting to eat for a long time. Plan your risk carefully.
On the Calendar
On the First Monday of December, the Economic Calendar has a light day. At 10:00 AM we get the Factory Orders report which will likely show strength and confirm expectations for fourth-quarter manufacturing strength. After that just a few bound auctions and a nonmarket moving TD Ameritrade report.
On the earnings calendar, we have 14 companies reporting today. A quick scan of the list and I don’t see any that are particularly noteworthy unless of course, you happen to own one of them. Make sure to keep checking and remember you’re the boss. Expect the best from yourself.
Action Plan
Last Friday I suggested that the market was going to be very sensitive to the news and to prepare yourself for possible violent price moves. During the Flynn testimony, we go just that! A very fast and nasty whipsaw that looked like it had completely reversed in just 20 minutes of trading. The promise of the tax reform bill likely to pass in the Senate revered it once again as the bulls regained control.
Now that the bill has passed the bulls are running hard this morning. The Dow Futures are pointing to a gap up around 200 points and sending the charts into a parabolic territory. One would think a huge selloff should be just around the corner, but I sure would not want to be betting against the strength of this bull run. In fact, with Dow 25,000 in sight, it’s likely to attract the bulls like a moth to a flame. Continue to trade with the trend but plan carefully and avoid chasing. Expect elevated volatility with triple-digit gaps and whipsaws possible in the days ahead.
Trade Wisely,
Doug
[button_2 color=”green” align=”center” href=”https://youtu.be/Ie3ZCLlhXOo”]Morning Market Prep[/button_2]
Consistency is Key
No matter if the market up-trending, down-trending or moving sideways to achieve lasting success consistency is key. I trade stock options because no matter the condition of the market there is opportunity to make a profit. Most options services like to hype the big percentage returns that options can provide but I prefer to focus on the consistency of my win/loss ratio. To prove that point Right Way Options has traded an account “live” in full view of the membership. Starting with $10,000 on Jan. 1, 2017 and trading small one, two or three contract positions. The win/loss ratio ranged between 65% and 75% winners holding only 5 to 7 trades at a time. Focus on consistency and money will take care of itself. Currently up more than 90% this year.
I’m not telling you its easy. Trading consistently requires hard work, determination, planning and discipline. The good news is that anyone can learn trade consistently. Trust me if an old carpenter can support his family for more than 12 years from trading profits, any one can!
Recently Closed Trades
CSCO 17% • BAC 31% • CREE 48% • WMT 245% • NFLX -40% • STX 42% • 2nd CSCO Trade 30%
Today’s Market Prep Note
Yesterday the Tax Reform bill appeared to be a slam dunk and a vote to was expected to happen at any time. I mentioned yesterday the next couple weeks could be bumpy as all the political drama unfolds. Last night’s delay has the Washington spin machine at high speed with both sides churning out more and more dramatic rhetoric. Listen closely, and you can hear the dramatic music reaching a crescendo. One side vows to save the day while the other promises to fight to the death because of horror this bill will bring. Blah, Blah Blah! Unfortunately, the stock market is directly in the line of fire. Traders should be very cautious. Violent price shifts are possible in either direction so plan your risk accordingly.
Become a Member Today!
30 Day Trial Monthly 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.
Doug Campbell is not a licensed financial adviser, nor does he offer trade recommendations or advice to anyone except for the trading desk of Right Way Options Inc.
