Price Resistance, Who will prevail?
Price resistance is the battle line of the Bulls and Bears. If the market is trending and holds above price supports, I always give the benefit of the doubt to the Bulls when challenging resistance. The selloff last Wednesday sliced right through and broke price support like a hot knife through butter. The rally into the end of last week brought us right back test resistance levels. Believe me, I want to see this market break higher, but because support broke, I have to give the Bears the edge at resistance. I will remain very cautious when it comes to adding new risk at this level. If I do decide to take any long positions, they will smaller than normal due to the higher perceived risk.
On the Calendar
Monday kicks off with no reports on the Economic Calendar but a total of 6 Fed speakers that feel the need to pontificate on interest rates. It would appear they have a lot to talk about because tey will be talking every day this week. We also must keep in mind that with the President traveling any news suggesting success or failure on this part could potentially move the market. On the Earnings Calendar, we have 41 companies reporting today.
Action Plan
It was nice to have the relief of the rally last Thursday and Friday. However, it is important that we notice the major indexes are right back into resistance zones. The Bears have had plenty of time to dig in and reinforce their battle line trenches, and I would doubt they that they will give them up easily. As for me, I want to manage the positions that I’m currently holding but remain very cautious on adding new risk.
I, like everyone else, would love to see the market move higher. If I remove my rose colored glasses just for a moment, I see that price is in the perfect location for a reversal. Please understand I am not suggesting that is what will happen! I am only pointing to the potential danger and the reason I won’t be in a hurry to add risk. I will happily change my thinking if the Bulls find the energy to overrun the Bears defenses.
[button_2 color=”green” align=”center” href=”https://youtu.be/PcVe1epYz5I”]Morning Market Prep Video[/button_2]
Trade Wisely,
Doug
Price and The T-Line Close Below The 20-SMA
(SPY) – Proceed with caution with price and the T-Line close below the 20-SMA. Price and the T-Line below the 20-SMA is a warning sign. It is true the Bulls brought price from $236.77 to close Friday at $238.31 an increase of $1.54, but they also brought price to the resistance line where the Bears will try defend what’s there’s. With Friday’s closing price below the T-Line and the T-Line below the 20-SMA, the sellers have an edge unless the Buyers can push and close the price above $239 at the bare minimum.
FREE TRADE IDEA – NSU
NSU became a Rounded Bottom Breakout chart pattern Friday when it closed over the 50-SMA. Price gaped Friday from consolidation and a Bullish Harami. The 2-day chart has printed a Bullish Hammer and the weekly chart has a Bullish Engulf, Engulfing the Hammer.
The Pop Out of The Box Workshop has three remaining packages left at the 15% discount. Tomorrow we will be putting them back on the shelf with the $247.00 price.
Did You Know
SSYS was a members trade idea on April 12, 2017? SSYS rallied 45% before the pullback.
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
[button_2 color=”orange” align=”center” href=”https://hitandruncandlesticks.com/pop-out-of-the-box-workshop-combo/” new_window=”Y”]Pop Out of The Box 15% Discount Ends Tomorrow | Only 3 Packages Remain at the 15% Dicount[/button_2]
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.
Rick Saddler is not a licensed financial adviser nor does he offer trade recommendations or advise to anyone except for the trading desk of Hit and Run Candlesticks Inc.
SPY Has Given Back Gains That Took 17 Days to Build
(SPY) – In one day this week, the SPY has given back gains that took 17 days to build. Closing back below the 34-ema and dropping out of the Lower T-Line Band will require the Bulls to work a little harder to rebuild. The 2 and 3-day charts show a Bearish Engulf with strong volume which suggests the Bears gathered their troops.
Above $238.07 would put price in the top half of this week’s drop and back above the T-Line.
FREE TRADE IDEA
– It’s Friday, no trade idea today but I do have a few trade I will share with our subscribers in our morning pre-market meeting.
Pop Out of The Box Plus Trading with Volatility Stops
The Workshop last night was a huge success, Doug Campbell Our Options partner taught how to use the Pop Out of The Box Pattern and using Volatility Stops to trade. Doug also presented everyone with six bonus files plus the recording to help with your trading education. Plus a 30-day Workshop Follow-Up Workshop.
Participants of the workshop received:
- A complete recording
- Adding Volatility Stop on TC2000
- Core ETF List
- ETF Core Inverse List
- Pop Out of The Box Pattern Workshop 5-18-17
- TC2000 Workshop Scans
- Volatility Stop Indicator for TOS
We still have 17 complete packages left at the 15% discount
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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
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.
Rick Saddler is not a licensed financial adviser nor does he offer trade recommendations or advise to anyone except for the trading desk of Hit and Run Candlesticks Inc.
An oversold bounce on Thursday but now what?
The oversold bounce was a nice relief yesterday, but difficult challenges lie ahead. The DIA, and SPY, have a huge hill to climb through a thicket of thorny underbrush. The IWM, well it’s looking up at a mountain covered in glacier ice! The QQQ has the best chance of conquering price resistance having only a grassy foothill to mount. The question is do the Bulls have the energy to climb on a Friday facing the uncertainty of the weekend. Keep in mind that the Bears still have the advantage and run downhill much faster than anyone expects. Wednesday was proof of that. I suggest extreme caution as we head into the weekend.
On the Calendar
Only Fed Speakers grace the Economic Calendar today there are no economic reports scheduled to be released. On the earnings Calendar, there are only 14 companies reporting today. CPB and DE are among the most not worthy.
Action Plan
The Bulls did a pretty good job bouncing back from Wednesday’s lows, but we are not out of the woods by any means. All the major indexes face the significant challenge of overhead price resistance price resistance. With the market now facing the uncertainty of the weekend expecting the market to break through is asking a lot. I’m not saying its impossible just unlikely. As of right now, the futures are pointing to a positive open.
I’m not going to rule the possibility of adding new positions today, but if I will keep the size of the trades small if I pull the trigger. Now I have to step over to the dark side and ask the question what if the market fails at resistance and starts back down? What if we see selling into the close of the day? As of now, I am ver comfortable with current holdings and willing to hold them through the weekend. However, if the Bears begin to charge south, I will need to reevaluate that decision. Selling into the close on a Friday often means new lows are in store for us next week.
[button_2 color=”green” align=”center” href=”https://youtu.be/_7_1KefObRo”]Morning Market Prep Video[/button_2]
Trade wisely,
Doug
Complacency took a big bite out of the bulls.
Complacency is dangerous in the market. When trader and investor slip into the thinking that the market is safe and there is nothing to worry about, it’s time to very worried! When complacency and resistance highs meet, it can trigger the perfect storm. Suddenly everyone becomes hyper-aware of the danger, and they begin to sell with both hands. The market itself appears to just leap out of the window. Volatility will now be high for a period, and price action will become more erratic. The index charts look like a slow moving train wreck. Go ahead and watch it but do it from a safe distance.
On the Calendar
Thursday kicks off with the weekly Jobless Claims numbers at 8:30 AM Eastern followed by the Philadelphia Fed Business Outlook Survey. The Philly Survey is a snapshot of manufacturing health within that specific district. The expectation is for additional strength this month. April came in at 19.6 with an expectation of a 22.0 reading this morning. On the Earnings Calendar, we have 61 companies reporting this morning. Among them are BABA and WMT.
Action Plan
My plan for today is simple. Manage my few remaining positions and sit on my hands. Futures are pointing to a gap down of about 100 points this morning. Clearly, emotions are high. The VIX shows us that complacency was at record levels. Traders and investors alike that had been lulled to sleep are now in panic mode. Don’t be surprised to more selling and volatility continue to rise. A relief bounce could come at any time, but I wouldn’t expect it to be tradeable except by very experienced traders.
If you are a new trader or inexperienced, I highly recommend you stand aside. Practice in a paper account, watch and learn how these events affect price movements. Allow the volatility to dissipate and wait for clear entries. If you think you can predict the turns; Stop right now! Emotions are unpredictable and can pivot on a dime. Calmer heads will prevail eventually but until then protect your capital.
[button_2 color=”orange” align=”center” href=”https://youtu.be/zK2Eq9Nkv6E”]Morning Market Prep Video[/button_2]
Trade wisely,
Doug
Price resistance is the battle line of the Bulls and Bears. If the market is trending and holds above price supports, I always give the benefit of the doubt to the Bulls when challenging resistance. The selloff last Wednesday sliced right through and broke price support like a hot knife through butter. The rally into the end of last week brought us right back test resistance levels. Believe me, I want to see this market break higher, but because support broke, I have to give the Bears the edge at resistance. I will remain very cautious when it comes to adding new risk at this level. If I do decide to take any long positions, they will smaller than normal due to the higher perceived risk.
