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.
[button_2 color=”green” align=”center” href=”https://youtu.be/1CM7RW3_8SQ”]Morning Market Prep Video[/button_2]
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.
[button_2 color=”orange” align=”center” href=”https://youtu.be/rL23IzyUxls”]Morning Market Prep Video[/button_2]
Trade Wisely,
Doug
Price And The T-Line Still Have a Bullish Attitude
(SPY) – Price and the T-Line still have a bullish attitude; The T-Line still has a bullish lift to it and price is not applying down pressure, at least as of yesterday’s close. Keep your eye price action, watch and listen to the story it tells.
We are finding that no matter what the indices do we can find a chart (s) that finds their path to bullishness. IPXL up 17% – SEDG up 30% – TDOC is 40% – VRX up 31% – these are trades that our members have been able to trade because the are trades we had presented to them before they made their move.
FREE Trade Idea – WAC
WAC painted a Bull Kicker yesterday and stepped into the Rounded Bottom Breakout circle. I also see a Morning Star and a Doji Continuation signal on a 3-day chart.
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 30 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
Campbell or this website is not financial or trading advice. All information is intended for Educational Purposes Only.
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The Bull’s showed resilience defending price support.
Defending price support with the Bears on the attack was important yesterday but price resistance continues to pose a problem. I have to admit that the Bulls displayed much more resilience than I was expecting. Great job Bulls! As a result, I want to be very bullish, but the fact remains that both the DIA and the SPY remain in a sideways consolidation. Don’t get me wrong I’m very grateful the Bulls defended the borders but they still seem to lack the energy to breakout. Futures are suggesting the Bears may be trying to regroup to mount another offensive this morning. Can the Bulls continue to hold?
On the Calendar
The Economic Calendar kicked off early today with a Fed speaker at 6:25 AM Eastern. The good news is that’s the only Fed member with something to say today! Is it just me, or does anyone else miss the days when the Fed was a lot more tight lipped? LOL. The weekly Jobless Claims numbers are a 8:30 AM as is the biggest number of the day Producer Price Index. On the earnings front, we will receive reports from over 300 companies today. The earnings calendar finally begins to lighten up next week and slowly wind down this quarter’s reports.
Action Plan
If the Bulls continue to show resilience defending support as well as they did yesterday, we will be in good shape. However, the Bears are attacking again this morning with the futures pointing to a lower open. Currently, hold 13 long positions I think is necessary to exercise a little caution on entering new trades. At the close of yesterday, all 13 positions were winners, so my top priority will be managing current trades and possibly taking some profits.
With the majority of the open positions being tech related I will keep a close eye on the QQQ. If there is a weakness there, I will be more inclined to start banking gains and reduce risk. I suggest everyone tighten up your stops. Remember trades can happen much faster than it’s possible to send out alerts. If you’re happy with the gain, take it. You can never go broke taking a profit!
[button_2 color=”green” align=”center” href=”https://youtu.be/WOuRqUx8tdk”]Morning Market Prep Video[/button_2]
Trade Wisely,
Doug
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!
