An oversold bounce on Thursday but now what?

May 19, 2017 by Doug Campbell

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.

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Trade wisely,

Doug

Complacency took a big bite out of the bulls.

May 18, 2017 by Doug Campbell

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.

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Trade wisely,

Doug

Bulls Walk Up the Stairs-Bears Jump Out the Window FREE Swing Trade Idea

May 18, 2017 by Rick Saddler

Bulls Walk Up the Stairs-Bears Jump Out the Window

(SPY) – How’s that Bullish wall of worry working now? It’s amazing how the bulls walk up the stairs, and the Bears jump out the window. You have to love panic and fear.

The gap down yesterday and the panic it caused will likely cause the SPY to test the March and April lows. The 2 and 3-day charts have painted a very hungry Bearish Engulf. I took a peek at the cloud chart, and the hourly, 2-hour and 4-hour have broken down and now flying below the cloud, and the daily will fly into the cloud today.

Yesterday I pointed out how the VIX was set up to rock the trading world and boy did it. Closing over its 200-sma puts it in a position to test upper downtrend line starting back in January this year.

FREE TRADE IDEA-MU (short)

MU – Micron Technology has enjoyed a sweet profitable run, but it may be time for those winners to cash in. April and Marches trading failed to push past Aprils high and with yesterday’s price action the chart id forming a Bearish “M” pattern. The weekly chart has presented us with a Bearish Engulf with a possible 20% target direction.

The UVXY trade was a HUGE WINNER for so many subscribers, entered on the Doji May 16, and sold May 17, for a 26.83% trade. We plan to revisit UVXY when the opportunity appears.

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

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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.

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.

Bears Seizes Yesterday’s Failure To Breakout FREE Swing Trade Idea

May 17, 2017 by Rick Saddler

Bears Seizes Yesterday’s Failure To Breakout

(SPY) – . The Bears seizes yesterday’s failure to breakout with Bullish follow through as a chance to step into the light. On May 10, “I wrote last week’s Channel is looking to get tested. I put the top channel line about $238.80 and the bottom about $237.70”. At the moment, the morning futures are between the two numbers. Below $237.70 would put enough pressure on the SPY to test the $235.50 area, and this may not be in the best interest of the Bulls and the 2017 summers future.

A weak close today below $280.80 would drop price below our lower T-Line Band, a close below the Lower T-Line Band could start the slide to test the lower numbers and set the course for the summer.

Over the past six trading days, the VIX has drawn a Doji and Bullish Engulf pattern followed by a follow through gap, then a PBO to support creating a Bullish Inverted Head and Shoulder bottom. On the 4-hour chart, I see a PBO Morning Star signal with price and Volatility Stop support.

Yesterday before the close I announced to the trading room I was buying UVXY, I am long at $11.72. My plan today will be no new buys, just manage what I have and build on a watch-list.

FREE TRADE IDEA – TZA

TZA – If you remember, on April 27, I recommended to Hit and Run Candlesticks Inc. trading account to buy TZA. Hit and Run Candlesticks did and still owns ½.The Bullish Morning Star on the daily chart and the Bullish Engulf on the 2 & 3-day charts have pushed price to resistance, and now the consolidation could be nearing an end.

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

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What is a Trade Idea Watch List?

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.

Reversal concerns at resistance. Who’s responsible?

May 17, 2017 by Doug Campbell

Reversal concerns at resistance. Who’s responsible?

Reversal concerns that I have been warning about seem to have had some merit. As soon as the retail market closed yesterday the futures began to plunge south. Undoubtedly there are a lot of traders that will feel slighted this morning. Most will place the blame for their troubles on the mean market rather than accept responsibility.

In truth, the clues of this possibility have been all over the place. The failure to notice them rests fully on the shoulders of the trader. I know that sounds harsh but it’s the truth. If the trader accepts the responsibility then this becomes a learning experience that will not be forgotten. However, it will be quickly forgotten and likely repeated by the trader that assigns blame somewhere else. As we always say, price action is leaving us clues and they must not be ignored.

On the Calendar

A light day on the Economic Calendar today with only the EIA Petroleum Status Report numbers of any significance. It will be out at 10:30 AM Eastern time and could easily move the market after its release. To also keep us on our toes with have 50 companies reporting today on the Economic Calendar.

Action Plan

It would appear my concern about the struggle with we were having with price resistance is being validated this morning. I know some likely thought I was out of my mind selling positions that were still going up yesterday. I’m sure glad we did at this point! Now, we must focus, avoid emotion and deal with the current trades we are holding.

My plan will be exit positions calmly and as efficiently as possible but only after an evaluation of price action. For example, our long-term position in MSFT will most certainly lose some value today but at this point, I don’t feel a need to cut lose. As the day progresses that decision could change but for now, I want to stick with the trade. However, others will likely have to be closed quickly to maintain profits. In short, I want to react to current conditions with a business frame of mind. Emotional decisions have no place in business.

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Trade wisely,

Doug

The T-Line Continues to Trend Higher with a Slow Grind Price Leading FREE Swing Trade Ideas

May 16, 2017 by Rick Saddler

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 2^nd 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%.

With on-demand recorded webinars, eBooks, and videos, member and non-member eLearning, plus the Live Trading Rooms, there is no end to your education. Start small and learn

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