Volatile Price Action raises questions of a top.
The volatile price action yesterday makes me question if we are truly experiencing a topping pattern under construction. If so it can be a very dangerous time to trade. Tops will normally display a lot of false price reversals and nasty intraday whipsaws. It may be time to reduce trading activity, so we don’t get chopped up in the volatility. If you have not already considering raising cash in your account it may now be the time. Always remember that Cash is a position.
On the Calendar
We kick off this Thursday on the Economic Calendar with Jobless Claims at 8:30 AM Eastern. Claims have been very low, and the forecasters expect them to continue to move lower today. Also at 8:30 is Philly Fed Business Survey which has been exceptionally well. Backlog orders have been rising month over month but the expectation for today is for a very slight pullback in the number. We still have two less important number at 8:30, Empire State MFG as well as the Import and Export prices.
At 9:45 is the Industrial Production number where the consensus is suggesting a 0.2% gain to 76.8% which is very strong. We have a Housing Market Index report at 10:00 AM and the Treasury International Capital at 4:00 PM, but both are unlikely to move the market unless they come in with a big surprise.
Action Plan
Looking at the futures this morning, I am very happy to have been cautiously sitting on the sideline yesterday. If you were there with me, then you are also enjoying the relief of know that your capital is safe while the market goes through its gyrations. The whipsaw after the Fed numbers was a nasty one and I wouldn’t want to rule out the possibility of more today.
I would expect a lot of fast moving price action this morning. If the Bears really take control, we could see some panic of a top move into the market. However, if the Bulls continue to fight back as hard as they have been doing lately, then we could easily see a full reversal back up. Unfortunately, unless you are an experienced day-trader, it would best just to stand aside and protect your money. I plan to continue being very cautious and don’t expect I will be adding any new risk this morning.
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Trade Wisely,
Doug
No fear ahead of today’s huge data dump.
The bulls show no fear at all as we head toward the FOMC announcement and calendar full of big reports. I would not be at all surprised to see choppy price action today. Swift whipsaw moves are not at all out of the question as with all the data the market will have to chew through. With the VIX close to testing historical lows once again it would be wise to remember how quickly no fear can shift to panic. I plan to do a lot of watching from the sidelines today.
On the Calendar
Today the Economic Calendar is a doozy. It kicks off with two very big reports at 8:30 AM Eastern, Consumer Price Index and Retail Sales. Consensus estimates expect the CPI to come in on par with last month’s number of 0.2%. Retail Sales is also expected to come in relatively flat with only 0.1% growth, as consumer spending remains weak. At 10:00 we a reading on Business Inventories which is expected to stay very low at 0.1%. The all important EIA Petroleum Status number comes out at 10:30.
At 2:00 PM we will finally get the FOMC Announcement on interest rates followed by the Fed Chair Press Conference at 2:30. On the Earnings Calendar, there are 30 companies reporting today so make sure to keep checking.
Action Plan
The market remains tenaciously bullish with the Dow making new all time highs and the SP-500 carving out a new all-time closing high. The VIX is once again pushing lower and may again test all-time low levels of fear. Even though the overall market keeps marching higher, it has become increasingly challenging to make money. The whippy price and surprisingly sharp drawdowns test even the most experienced traders.
With this huge data dump today I plan to move very slowly watching price action closely. I expect to see very choppy price action this morning, and potentially swift whipsaw moves as the market digests all the data. Personally, I won’t rule out adding new positions, but I will most likely just enjoy the show from the sidelines. I have had a fantastic year so far, and I see no need to charge head first into danger. My method is to be more like a sniper, waiting quietly for the shot picture to clear before pulling the trigger.
[button_2 color=”red” align=”center” href=”https://youtu.be/7-x_GqHGhbI”]Morning Market Prep Video[/button_2]
Trade Wisely,
Doug
Don’t Fall For The “Yellen” Knee Jerk Today
(SPY) Today could be a game changer, or just more of the same just don’t fall for the “Yellen” knee jerk today. We at Hit and Run Candlesticks have always found it better to be patient and follow the charts. Never could understand why traders continue to front run and guess what will happen. Currently, the Bulls are in control over about $241.90 on the SPY, under could be a different story.
Free Trade Idea – HDP
HDP (Hortonworks Inc) Gapped and broke out on May 5th ran a bit and then stared to see profit taking. HDP looks have found support near the 34-ena and the 50-sma. A Bullish Morning Star lead to a breakout of the T-Line. Over $13.60 we see a possible 20%
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Conditions For The HDP Trade
- Higher Lows and Higher Highs
- 2 and 3 day J-Hook setting up
- Trending
- Bullish Engulf (5 day chart)
- Swing or swings: 20% Plus
Why Trade With Hit and Run Candlesticks
OMER is up 23.46% from our members only post on April 4, 2017 and up 14% yesterday. Tell us why your not with us and you could win.
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200 shares of OMER was worth $744.00 Yesterday –
Hit and Run Candlesticks Movers Yesterday
- OMER 15.5%
- HDP 10.76%
- SGMS 8.35%
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.
Morning Futures Are Trying To Bounce the Market
(SPY) The morning futures are trying to bounce the market with help from our 4-hour chart $242.90 support line. Yesterday I was asked how we came up with $242.90? I used the 4-hour chart, and the Volatility stops. When I was looking at charts, I noticed the 4-hour chart had a string of Volatility Stop dots, and I laid a line just below. If you have the Volatility Stops on your chart, you can see how price slipped below, but the closing price stayed above. We remain very cautious.
Free Trade Idea – PLUG
PLUG (Plug Power Inc) Started it’s pattern back on May 18, followed by a lot of indecision then the Bullish Morning Star appeared followed by a PBO.
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 PLUG Trade
- Bullish Engulf
- 12 days being inside
- Bullish Morning Star
- 3 bar PBO
- Bullish Harami
- Rising
- Swing or swings: 20% Plus
Why Trade With Hit and Run Candlesticks
HMHC is up 29.86% from our members only post on April 10, 2017; Education builds confidence.
300 shares of NVCR was worth $945.00 Yesterday –
Hit and Run Candlesticks movers Yesterday
- OMER 11.84%
- DVAX 9.72%
- IPI 5.48%
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.
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 is decisive but support holds.
It was encouraging to see positive price action and the DIA, SPY, and IWM holding price supports. Even the technically damaged QQQ managed to stave off additional selling. Price action, however, proved to be very two-sided and whippy. As a result, the markets left behind indecisive patterns that will keep me on the side of caution. The market faces a massive data dump tomorrow as well as a rate decision from the FOMC. Don’t be surprised if we continue to see choppy price action and indecisiveness today.
On the Calendar
Today begins the FOMC meeting that culminates tomorrow afternoon with their decision on interest rates and Yellen’s Press Conference. Also on the calendar today it’s the Producer Price Index (PPI) at 8:30 AM Eastern and a Fed speaker at 1:45 PM. PPI rebounded slightly in April, but services remained weak pointing to a concern of demand weakness. Consensus sees the number increasing by 0.1% with food and energy at 0.2%.
On the Earnings Calendar, we have 32 companies reporting today. I don’t see any potential market moving earnings reports, but it is always wise to check your holdings and new purchases for reporting dates.
Action Plan
With the FOMC rate decision looming I think could see a lot of chop and whippy price action as we wait. Odds of a rate increase are running in high 90’s percentile. As of right now, the overall market seems to be taking the likely rate increase in stride showing fell ill effects. The four major indexes held up better than I would have expected after Fridays surprise tech sector selloff.
Futures are currently pointing to a slightly bullish open and except for the technical damage in the QQQ overall the market remains bullish. However, there is a huge wave of data coming at on Wednesday, and I feel the need to remain quite cautious when considering new risk. I will not rule out adding new positions today but keep them smaller than normal, and I will need to see the Bulls showing better commitment overall. Choppy anemic price action just won’t get it done.
[button_2 color=”green” align=”center” href=”https://youtu.be/ftbE77Ebtic”]Morning Market Prep Video[/button_2]
Trade Wisely,
Doug
Will We See Another Test Of Support?
(SPY) Will we see another test of support? Friday the SPY tested the T-Line and May 25,26, 31 – June 2 support line ($241.75) but the buyers closed us above the T-Line. The QQQ’s took a huge hit Friday well below the T-Line and below the lower T-Line Band. The QQQ’s did find support near the 34-EMA and the Mat 14 support line. I suspect we see a bit more weakness, there for the $241.75 support line will be key to bullishness or more correction.
Free Trade Idea – ACOR
ACOR (Acorda Therapeutics Inc) as found a bottom at $13.80, Bulls have stepped in pushing the Bears out. Price has risen know to a tradable bottom. To learn more about the ACOR chart login to the trading room or what for a trade of the week video.
With on-demand recorded webinars, eBooks, and videos, member and non-member eLearning, plus the Live Trading Rooms, there is no end your education. Start small and learn
Conditions For The ACOR Trade
- RBB Pattern
- Tweezer Bottom
- Near Bullish Engulf
- Bullish Morning Star
- Bullish J-Hook
- Rising
- Over 25% Swing (s) possible
Why Trade With Hit and Run Candlesticks
NVCR is up 21.91% from our members only post on June 1, 2017; Education builds confidence.
300 shares of NVCR was worth $825.00 Friday –
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.
Friday’s whipsaw has caution flags flying high.
The Friday afternoon whipsaw was simply Nasty! It left traders counting up losses on stopped out trades where just a couple hours earlier they had been looking at gains. It also quickly spiked fear and once gain reminded us how dangerous complacency becomes at or near market highs. At a minimum, Friday was a warning that we must always be at the top of our game and a “safe” market does not exist. As for me, I will be approaching today’s market with extreme caution and a very watchful eye on price action. Was this a one-off event or a warning of trouble ahead? Only time will tell.
On the Calendar
The Economic Calendar begins with a whimper today but will roar like a lion by mid-week when the FOMC comes front and center. Today, however, we only have a few bond auctions and the Treasury Budget that comes out at 2:00 PM Eastern. Although it should be shocking that May is expected to produce an 87.0 billion dollar Federal deficit, it will pass without notice. In truth 87.0 billion is a slight improvement over last years numbers.
On the Earnings Calendar only ten companies reporting earnings today none of which are overall market movers. Always remember to check earnings on each and every stock you hold and are thinking about purchasing. There is no excuse for being surprised by an earnings report.
Action Plan
Friday’s wild price action ride amounted to a very nasty whipsaw. I ended up closing a couple of positions in response to preserve some small gains. Caution lights began flashing all over the place as I looked through charts and that caution remains this morning. Futures are currently pointing to a slight gap down open today but what we will have to pay very close attention to is how traders react after the open.
The VIX after hitting a new low record low Friday morning rather suddenly shot up 28% but settled up only 14% by the close. That kind of volatility is difficult even the most experienced traders. As a result, I am suggesting that new or struggling traders should stand aside, watch and wait. Price action like this could turn out to be nothing, or it could be a warning of turmoil ahead. I will manage my current positions, but I will be waiting for good price action clues before even considering new risk.
[button_2 color=”orange” align=”center” href=”https://youtu.be/mU0Yd4cULJs”]Morning Market Prep Video[/button_2]
Trade Wisely,
Doug
The volatile price action yesterday makes me question if we are truly experiencing a topping pattern under construction. If so it can be a very dangerous time to trade. Tops will normally display a lot of false price reversals and nasty intraday whipsaws. It may be time to reduce trading activity, so we don’t get chopped up in the volatility. If you have not already considering raising cash in your account it may now be the time. Always remember that Cash is a position.
