The T-Line Continues to Trend Higher with a Slow Grind Price Leading
(SPY) – The T-Line continues to trend higher with a slow grind with price leading. The Bulls keep clawing their way up the wall of worry. On the SPY’s daily chart a Bullish trend continuation J-Hook pattern is being printed. Yesterday’s candle put the last three days’ pattern in the same family as the Bullish Morning Star. You can also see this on the 2-day chart and a Bullish Engulf.
Yesterday the SPY closed at an all-time new high breaking back above our upper T-Lind Band, on the 3-day chart the SPY has closed above the upper T-Lind Band the past 6 bars. All this was made possible with the help of the 11 S&P-500 Spiders I follow closing above the previous days close.
FREE TRADE IDEA – CEMP
CEMP – Has constructed a Bullish Reverse Scoop Pattern along with a Bullish “w” pattern and a double bottom. The chart could be ready to break above the recent resistance and to our dotted Deuce. On May 2nd we posted VRX to or subscribers, nine days later it is up 46.69%
On our trade ideas tracking list Hit and Run Candlesticks has produced five trades above 30% – 6 trades above 20% – and 19 trades between 10% and 19%.
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What is a Trade Idea Watch List?
A trade idea watch list 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 watch-list, we wait until price action meets our conditions for a trade.
Investing and Trading involve significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc. is not financial or trading advice. All information is intended for Educational Purposes Only. Terms of Service
Bullish price action warrants cautious optimism at resistance.
The bullish price action and the strong close lifted my optimism of a breakout yesterday afternoon. Because I am long 12 positions, I obviously have an upside bias, but I must acknowledge the overhead resistance. Even with the great effort, the Bulls made yesterday resistance still proved to be a stumbling point. I’m holding out hope that today will be the breakout but I am prepared to capture my gains quickly if resistance proves too strong.
On the Calendar
The Earnings Calendar kicked off early this morning with HD reporting better than expected earnings about 6 AM Eastern time. Let’s hope the 70 plus other companies do as well and it’s enough energy to break the market out of the current price range. For now, I will cheer for HD because the DIA needs all the help it can get!
On the Economic Calendar, we have two potentially market-moving reports. First, off is the Housing Starts number at 8:30 AM Eastern followed by Industrial Production. Both are important numbers because they directly point to the health of our overall economy. Growth in both areas would sure help to lift the market out of its recent doldrums.
Action Plan
I am approaching the market with cautious optimism. The nice showing in the SPY yesterday and its strength into the close inspires the optimism. The caution comes in the form of resistance that as of yesterday proved to an obstacle the market was unable to overcome. As a result, I’m happy to be holding a significant number of long positions yet feel the need to manage them closely. If a failure price pattern were to occur this would be the place to watch for them. Currently, futures are pointing to a slightly positive open, but a lot can happen over the next couple hours as the market responds to earnings and market reports. My plan is to stay long, but I will be laser focused on the markets price action and will not hesitate to capture gains if a failure pattern develops.
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Trade wisely,
Doug
Consolidation enters week #4 as choppy price action continues.
The long the consolidation lasts the bigger the pressure becomes and the possibility of a big fast move. If the move happens to occur in the overnight or pre-market sessions, a trader can themselves trapped in bad positions. Although I will continue to trade, I will limit the number and size of the trades as a method of controlling risk. Discipline to stick to a plan can be difficult to matain during long consolidations. However, the trader that breaks discipline may quickly find themselves on the wrong side of price when the break occurs. Please be careful!
On the Calendar
We kick off a this Monday with the Empire State MFG Survey at 8:30 AM Eastern time follow by the Housing Market Index 10:00 AM. Later today at 4 PM the Treasury International Capital numbers will be released. These are all important reports, but it’s unlikely they will move the market unless they happen to issue a very big surprise. I know you will all be shocked, but there are no Fed speakers today on the calendar! On the Earnings Calendar, we have just over 240 companies reporting today in what looks to be the last mass reporting days this quarter.
Action Plan
As the market remains in a choppy consolidation at resistance, we must remain cautious and flexible and focused. Cautious, because of the pressure that is building for a big move and no one knows which way. Flexible, due to the fact we may be required to reverse our trading plans very quickly when a breakout or breakdown occurs. Focused on price action even though it’s easy to become bored and complacent during a long period of chop.
Futures are pointing to a higher open today, but it would seem we still lack the energy to break out. Manage the positions you’re in and move slowly to enter new long trades as we bang away at the door of resistance. Now is the time to be very picky a to cut positions sizes if you do decide to enter new trades.
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Trade Wisely,
Doug
BW Is Now Above the Second Layer of Resistance
BW Is now above the second layer of resistance, and the RBB chart pattern has developed well. This week I will be waiting for a clue that the buyers have finished their profit taking.
The Market
(SPY) – The Bulls managed to close with a Doji on support. Friday was the fourth day in a sellers pullback that found support near our $238.80 support line.
With the Cyber attack, this weekend here is a few stocks to keep an eye – don’t chase. CSCO, FEYE, SYMC, CHKP, PANW, CYBR, VDSI, and HACK
SPDRS Select Sector Technology (SPY ETF) has remained strong and steady while the other nine have are undecided to weak. Utilities and Healthcare are trying to show signs of Bullishness, let’s let them prove it first.
Learn from Charts
On April 12 we posted to the Hit and Run Candlesticks Members HDP we setting up to push higher. It’s now into the void. Congratulations to the holders of HDP your up now 22%. Remember to talk a few profit along the way.
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What is a Trade Idea Watch List?
A trade idea watch list 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 watch-list, we wait until price action meets our conditions for a trade.
Investing and Trading involve significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc. is not financial or trading advice. All information is intended for Educational Purposes Only. Terms of Service
SWKS Option Trade of the Week | Video Reply
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- Trade Alert issued on May 5, 2017.
- Currently Holding.
- Trending stock breakout with a Bull Put Credit Spread.
- Currently a 58% gain as of the close May 12, 2017.
30-Day Trial | Hit & Run Candlesticks or Right Way Options
Investing and Trading involves significant financial risk and is 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
Price Below the Upper T-Line Band is a Warning
(SPY) – Price below the Upper T-Line Band is a warning, price below the Lower T-Line Band is a clue the Bears out number the Bulls. On May 11 I wrote, “ Last Weeks-Channel Looking to Get Tested I put the top channel line about $238.80 and the bottom about $237.70.”
Yesterday the sellers were a mission to drive the price lower. However, the Bulls rallied back on a Tweezer Bottom closing the day with a Hammer at $239.38. Candlestick tip: Hammers require confirmation. Bases on the early morning numbers it looks like we are going to open inside the T-Line Bands and inside the Hammer handle.
Yesterday WAC gave an early morning entry then rallied 19%, WAC took out 2 of our targets.
FREE Trade Idea – SPWH
SPWH Has been constructing a reversal bottom for the past two months. This week SPWH broke out of a Bullish “W” pattern and Wednesday it became a Bullish Rounded Bottom Breakout. Traded and managed correctly I see a possible 20% plus trade.
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What is a Trade Idea Watch List?
A trade idea watch list 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 watch-list, we wait until price action meets our conditions for a trade.
Investing and Trading involve significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc. is not financial or trading advice. All information is intended for Educational Purposes Only. Terms of Service
Choppy price action continues. Will the consumer break the tie?
Choppy price action is very difficult for all traders to manage. This week I have been warning of the dangers of being overly long the market when resistance has been so difficult to breach. So far we have been lucky that the Bulls and Bears have remained equally matched. The tie breaker could be today when we get a read on the strength of the consumer. I think it would be wise to prepare plans for both a break of resistance and support. Because we have been in such a tight range for so long, pressure continues to build and price move on any break could be substantial. Be prepared!
On the Calendar
Today on the Economic Calendar we have the Consumer Price Index and Retail Sales reports at 8:30 AM Eastern time. I think both of these numbers will be of utmost importance and will likely set the direction for the market. At 10:00 AM we get a reading on Business Inventories and Consumer Sentiment. So far every single day this week there have been Fed speakers and Friday will be no different with three speakers. On the Economic Calendar, there are only 60 companies reporting, but that is not an excuse to stop checking. It only takes one report like SNAP to destroy a traders progress. Always find out when a company reports and have a plan to protect your capital.
Action Plan
I need to be a flexible this morning and have a couple of plans prepared. I”m think today will hinge on the strength of the consumer. With the overall market chopping sideways at resistance the Retail Sales numbers could easily be the deciding factor on direction. As a result to be prepared with a couple of plans.
If the numbers are really good and the market reacts positively, I want to prepare for a potential upside breakout. If this occurs will want to hang on to existing positions and even look for new trades that are set up. Toward the end of the day, I will have to make decisions on individual positions; take profits, or hold through the weekend.
If the numbers show weakness in the consumer, the market will likely react negatively. With price support so close it could easily give way allowing the market to tumble lower. In that event, I want to be ready and willing to close profitable positions and protect capital on trades losing money. Obviously, a negative close below support could lead to more selling early next week. Consequently, I would want to go into the weekend with less exposure to the market.
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Trade Wisely,
Doug
