Profit Takers Are Coming Out
Profit takers are coming out in the overall market. Candlesticks patterns and signals are starting to suggest the big bulls are in need for profits, evidence of profit taking can be seen in the SPY, QQQ, DIA, VT, and VTI ETF’s. Candlestick and price action of the SPY suggest the next 2 big numbers are $240.40 followed by $237.60. The Bulls will not likely give in willingly or easy, so we should see minor relief rallies.
Free Trade Idea – UVXY
UVXY (Ultra Vix Short-Term Futures ETF) Became an HRC-RBB chart pattern yesterday with tremendous profit potential. The 3-day chart is set up for our Pinball Strategy. On the 3-day chart.
With on-demand recorded webinars, eBooks, and videos, member and non-member eLearning, plus the Live Trading Rooms, there is no end your trading education here at the Hit and Run Candlestick, Right Way Option, Strategic Swing Trade Service and Trader Vision.
Conditions For The UVXY Trade
- Bullish Harami 3-day chart
- Engulfed Lower and Upper 4-hour Band
From our Members Watchlist
SGMO is up 83.16% from our members only post on March 6, after hitting resistance. 83.16 profit or the piece you may have will look and feel good in your bank account.
Hit and Run Candlesticks Trade Ideas -vs- SPY Last 7 Bars
- CARA +51.32%
- IMGN + 33.20%
- ESPR +27.04%
- VRX +23.61%
- DVAX +20.48%
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What is a Trade Idea Watchlist?
A trade idea watchlist is a list of stocks that we feel will move in our desired direction over a swing trader’s time frame. That time could be one to 15 days for example. From that watchlist, we wait until price action meets our conditions for a trade.
MEMBERS ONLY
Investing and Trading involve significant financial risk and are 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.
Price Action Favors the Bears, But?
Price action certainly favored the Bears yesterday as the market sold off into the close and smashing through support levels. Normally we would expect to see more selling at the open today, but this choppy market is far from what I would call normal. Whipsaws can happen in either direction, and we certainly know this market has the willingness to whip. Also, keep in mind the possibility we could see a little end of quarter window dressing as we wind down the week. I will continue to expect very choppy and whippy price action so keep a close eye on the price action.
On the Calendar
Hump day begins with the International trade in goods report before the market opens at 8:30 Am Eastern. The April number deepened the deficit by 3.5%, but the consensus is expecting a slight improvement for the May number. At 10:00 AM we get a reading on the Pending Home Sales Index which is expected to improve by 0.5% this month. At 10:30 we get the EIA Petroleum Status Report which will likely be most watch number of the day. Supplies have been in decline but not fast enough to improve oil prices just yet. A continued draw down will be important for the overall market.
On the Earnings Calendar, we have 24 companies reporting today. MON and PIR are among those reporting and may be the most noteworthy for our members. It is also wise to keep in mind as the end of the quarter approaches watch for the possibility of window dressing which could begin at any time.
Action Plan
The afternoon selloff yesterday made a mess of the index charts. The SPY is very close to testing the 50-day average while the QQQ’s closed below the 50 for the first time this year. The DIA is currently the strongest of the indexes failed price support yesterday as did the IWM painting a pretty bleak picture. However, we are close to the end of the quarter which is often the time we see the institutions do a little window dressing before they close the books. Logic would suggest we see more lows today, but we should keep an eye our for a possible bounce that could begin at any time with that window dressing in mind.
My SPY hedge position at the end of the day was showing a very nice overall gain due to yesterday’s selling. As this position is entering its heavy Theta Decay period, it would be in my best interest to exit the position very soon. I will be watching the SPY closely this morning with that in mind and may take the profits today. Before adding any new trades, I will need to see some buyers stepping I to support current prices. I must also start watching for stocks setting ups short trades and begin building that list to prepared if we start to see a full on the shift in the overall market trend.
[button_2 color=”green” align=”center” href=”https://youtu.be/LJtJiwKPZjw”]Morning Market Prep Video[/button_2]
Trade Wisely,
Doug
Cash is a position often underutilized.
As short-term swing traders, we often get caught up in the idea that every day is a good trading day. Yesterday should have proved that idea to be untrue. Sitting in front of our computers, we get bored and feel the need to make trade decisions even when the market is proving to chop up our accounts. The problem is, most traders underutilize the decision to remain in cash. Cash is a position, and in times like this, it can be the best possible trade decision. If you find yourself tired of getting chopped up in this whippy price action losing back to the market your hard-earned profits, perhaps it’s time to stop trading. There is an old saying, if you find yourself in a hole then stop digging!
On the Calendar
Tuesday begins with the S&P CoreLogic Case-Shiller number at 9:00 AM eastern time. CoreLogic is a home price index tracking monthly changes in real estate values. Gains so far, this year have been strong, and forecasters see the April number increasing by 0.6%. I wonder how much longer we can see prices increase while real wage growth continues to lag way behind. At 10:00 AM we get a reading on Consumer Confidence. Customer attitudes on the economy have been falling back from post-election highs. Consensus suggests yet another move lower this month. Although these reports are important, they are unlikely to move the market unless they issue a number that surprises the market.
We have 2 FED speakers during market hours today with one of them being Janet Yellen herself at 1:00 PM. On the Earnings Calendar, we have 20 companies reporting earnings. A couple of note that members have been trading are KBH and DRI.
Action Plan
My warning of caution with the gap up open yesterday turned out to valid as the market issued a very cruel whipsaw to those who chased in emotionally. The DIA clung to price support, but the SPY’s reaction to price resistance pushed the index back to lower range of the chop zone, now in its 18th day. The QQQ left behind the most bearish pattern of all the indexes with a dark cloud cover pattern right at resistance. Surprisingly, IWM turned in the best performance of the day resisting sellers and closing just above resistance levels.
Futures are pointing to a slightly lower open but not nearly as much as I would have expected based on yesterday’s performance. I think there is a very good chance we remain stuck and very choppy. Yesterday should be yet another proof how dangerous and potentially damaging to your account choppy markets can be. I will continue to exercise caution favoring capital perseveration over risk until the price action shows improvement. For me that means more standing aside watching and waiting. When I do trade, they will be smaller than normal positions sizes. Always remember Cash is a position!
[button_2 color=”green” align=”center” href=”https://youtu.be/21SUfd0ZdIg”]Morning Market Prep Video[/button_2]
Trade Wisely,
Doug
SPY Has Been Wondering Around With Its Eyes Closed
(SPY) For about 18 days now the SPY has been wondering around with its eyes closed, no direction other that sideways which is perfectly fine because we have been able to find and trade the profits right to the bank.
We took 38.52% of VRX to the bank yesterday – Soon we will take CGI, IMGN, VSTO, ARDX, DRIP, all double-digit gains to the bank. (No coin here all folding money)
Free Trade Idea – GNMX
GNMX (Aevi Genomic Medicine Inc) Became an HRC-RBB chart pattern yesterday with tremendous profit potential. The 3-day chart is set up for our Pinball Strategy. On the 3-day chart.
With on-demand recorded webinars, eBooks, and videos, member and non-member eLearning, plus the Live Trading Rooms, there is no end your trading education here at the Hit and Run Candlestick, Right Way Option, Strategic Swing Trade Service and Trader Vision.
Conditions For The GNMX Trade
- RBB setup
- Inverted Hammer
- Higher Lows
- J-Hook
- Swing or swings: 30% Plus
From our Members Watchlist
VRX is up 76.81% from our members only post on May 5, 2017; VRX popped another 8.10% yesterday closing above the 200-sma. Can you see how VRX when from a Pinball setup to an RBB setup, then closed above the 200-sma?
Hit and Run Candlesticks Movers – SPY VS Members List Last 7 Bars
- IMGN +48.91%
- CARA +48.42%
- VRX +34.91%
- ESPE +28.39%
- CAR +26.58[button_1 text=”Incase%20you%20Missed%20The%20Free%20J-Hook%20eBook” text_size=”32″ text_color=”#000000″ text_bold=”Y” text_letter_spacing=”0″ subtext_panel=”Y” subtext=”Click%20Here” subtext_size=”15″ subtext_color=”#f63131″ subtext_bold=”Y” subtext_letter_spacing=”0″ text_shadow_panel=”N” styling_width=”40″ styling_height=”30″ styling_border_color=”#000000″ styling_border_size=”1″ styling_border_radius=”6″ styling_border_opacity=”100″ styling_shine=”Y” styling_gradient_start_color=”#ffff00″ styling_gradient_end_color=”#ffa035″ drop_shadow_panel=”N” inset_shadow_panel=”N” align=”center” href=”https://hitandruncandlesticks.com/swing-traders-j-hook-pattern/” new_window=”Y”/]
What is a Trade Idea Watchlist?
A trade idea watchlist is a list of stocks that we feel will move in our desired direction over a swing trader’s time frame. That time could be one to 15 days for example. From that watchlist, we wait until price action meets our conditions for a trade.
MEMBERS ONLY
Investing and Trading involve significant financial risk and are 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.
SPY opens its 17th day inside a 3 point chop zone.
At the close of Friday, there were bullish signals popping all over the place with when the Bulls began to push the last 30 minutes of the trading day. However, the futures popping inspiring the emotion to chase let’s keep in mind that the SPY even with a gap up open will still be within the same 3 point range it has chopped in for 17 days. Could this be the bullish move that breaks us out? Yes, but it could also be just another setup for a whipsaw. Try to avoid the urge to chase and closely watch the price action. Wait for clues that real buyers are stepping in after the open and keep in mind that the SPY will still be trading near the upper resistance of the chop zone.
On the Calendar
We get the last trading week in June kicked off with the Durable Goods Orders at 8:30 AM Eastern time. Goods orders have only managed a produce a 1/10th monthly growth this year. The April reading marked a monthly decline of 0.7%. Consensus for May is suggesting another decline of 0.4% although ex-transportation orders may show growth. Other than that there are a couple of insignificant reports and a few bond auctions to round out the calendar.
On the Earnings Calendar, there are only 14 companies expected to report results today. Remember this is the last week of the 2nd quarter, so we will soon be right back into the thick of heavy earnings reports soon. When planning options trades, it is important to upcoming earnings part of your consideration.
Action Plan
Friday saw another day of indecisive price action but the last hour left us some important clues as the Bulls rushed in at the end of the day. That bullish action appears to have carried over to the pre-market futures which currently indicate a sharp gap up at the open. As you know, I am always cautious about gap up opens at or near market highs due to the possibility of whipsaws. I want to see real buyers stepping in after the open not just the market maker pump that can be nothing more than a trap.
Friday left behind some very good looking bullish chart signals. Two, in particular, will have my close attention at the open. WYNN and BSX are both possible trades this morning if they don’t gap up to far and if this futures bullishness translates to buyers stepping into the fray. Let’s keep in mind that the SPY has chopped in a 3 point range for 17 days. The expected gap up this morning will still be within this choppy range. What that means to me, is to avoid the whipped up emotion created by the pre-market futures and stay focused on price action. There is no reason to rush or chase into the market when all the early blustering opens in the day within the chop zone.
[button_2 color=”green” align=”center” href=”https://youtu.be/XwadqezpYI4″]Morning Market Prep Video[/button_2]
Trade Wisely,
Doug
