The Bulls Are Pounding On The Door Of Resistance, Will It Open?
The Bulls were able to win the battle yesterday in 3 of 4 indexes and as a result, are pounding on the door of resistance. The question that still needs to be answered is, will it open? As I mentioned yesterday, this is a battleground, and it seems like the first round was won by the Bulls. Most noteworthy is the NASDAQ which is very close to making new all time highs. For new or inexperienced traders this is a great chance to study possible topping patterns. Price action resistance is always of critical importance and therefore must be given respect as you plan the day ahead.
Events to Consider
I think the GDP number at 8:30 AM Eastern will be critical today. A good number may be all that’s needed to inspire the bulls to stampede through resistance. On the other hand, a bad number could have the opposite effect allowing the bears to feed. Also on the Economic Calendar, today is the Weekly Jobless Claims and a slew of Fed speakers. The Earnings Calendar has 92 companies reporting, and therefore we must continue to stay on our toes to protect our capital.
Plan of Action
My plan is to wait for the reaction to the GDP number because it will likely influence today’s open. Although resistance will challenge any upside move, another consideration will be the possible window dressing effect. I remain cautiously bullish but will be ruthless in the protection of my profits due to the power of price resistance. Failure patterns here are not to be trifled with so in conclusion I recommend we remain very cautious. New and inexperienced traders are highly encouraged to stand aside while this battle continues.
I wish you all a productive and profitable day.
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Trade Wisely,
Doug
Bulls still struggle with the bears
From a bull’s eye SPY:
Bulls still struggle with the bears – price action has acted well the past three days and has now closed over the T-Line two of the three. Note the T-Line remains above the 34-EMA. Unfortunately, price action is struggling with resistance which is keeping the battle on. Note the lower highs and lower lows continue. At this point, I think it very important to wait for a decisive direction in the market.
On the 1-hour chart price struggles with our dotted deuce and 200-SMA and the resistance, it has created.
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(RH) Restoration Hardware Holdings Inc. Was members trade idea on March 3, 2017, after a Bullish Kicker candle pattern with a pull back. Note the T-Line run and the higher highs and higher lows. Yesterday are RH gapped giving members 39.96%
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Morning Star candlesticks pattern
If you’ve ever wished upon a star, I hope that that star was a Morning Star candlestick pattern. Unlike the Evening Star, an omen that hints at bad things to come (i.e., low stock prices), the Morning Star is a sign of good fortune. If you spot this bullish reversal signal, which is composed of three candles, you can expect stock prices to increase. Although the bears have been in control, the bulls are ready and able to take over. To learn how to spot the Morning Star signal, how to decipher its characteristics, and how to interpret its meaning, Read More.
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T-Line Crossovers to Point Out the Start of a Trend | Video Replay
Video topic, T-Line Trading, and T-Line Crossovers. The T-Line will keep you on the right side of the trade if correctly. Keeping a long trade above the T-Line and for a short trade below the T-Line is a proven strategy. Adding moving averages, slower or faster to show a short term trend change will increase trading probabilities and as a result increase trading success. This is what makes the T-Line Crossovers very useful to the swing trader.
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5 Moving Averages in Video
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- T-Line crossing the 16-EMA
- T-Line crossing the 34-EMA
- 2-EMA crossing the T-Line
- 3-SMA crossing the T-Line
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Swing Trading the T-Line
Swing trading the T-Line is easier than you might think. If you are in a long trade, stay long until the price action closes below the T-Line. If you are in a short trade, stay short until the price action closes above the T-Line. It’s as simple as that, but of course, there are many other factors to take into consideration if you want to be successful. Swing trading the T-Line isn’t black and white. The proper way to trade the T-Line is to combine everything you know about trends, support/resistance, candlestick signals, chart patterns, moving averages, and any other indicators. Read More
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Spotlight Chart – CC
CC was up another 5.50% yesterday
Current up – 55%
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Set Up – (RBB) Rounded Bottom Breakout
Set Up – Doji Continuation
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From a bull’s eye SPY:
Consumer confidence rallies the Bulls – the spy rallied off the 50 day simple moving average closing back over the T-Line and the 34 EMA. While closing over the 34 EMA and the T-Line is impressive we still have to consider the resistance, that price is just now starting to test at $235.80.
Looking at the 2-hour chart – Price has faced the blue ice failure pattern and failed, it is once again testing the blue ice with the T-Line underneath the 34 EMA with a string of lower highs. As of this morning, Hit-And-Run Candlesticks remains extremely cautious and questions the bull recovery the past couple days.
For centuries, Japanese candlestick charts have been used to develop forecasts for financial investment. In reading and interpreting the information conveyed by those blocky little candles and their wicks, we can understand a stock’s movements and predict its future. Risk is unavoidable, but you can increase your confidence and your success rate by studying patterns, developing forecasts, waiting for confirmation, and remaining calm and vigilant. Learning how to trade Japanese candlesticks requires practice and patience, but it’s well worth the effort.
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The Danger Zone Battle Begins, It’s Time To Raise Your Caution Level
The price of the major indexes finished the day pressed directly against the Danger Zone of price resistance. The feeding grounds of the Bears! If a reversal of the market is to occur it would be right in this area. We should be watchful of the Bears reestablishing dominance. With the end of quarter window dressing possible, this could be an interesting battle to watch from a distance. However, joining the battle in the danger zone could prove to be very damaging to your account. Futures were slightly positive overnight but once again have moved to the downside this morning. For new stock and options traders, this is a battle you should consider sitting out until there is evidence of victory has been established. Keep in mind this fight could take a couple of days with consolidation as a result.
Events To Consider
On the Economic Calendar, we have pending Home Sales and the all important Petroleum Status Report at 10 AM Eastern and 10:30 AM Eastern respectively. The Earning Calendar shows 63 companies reporting today. Stay on your toes around these events and reports. The last thing we want to do is get caught, unaware. As the CEO of our trading business’s, the responsibility lies directly on our shoulders.
My Plan Of Action
As for me, I will be very slow to move on new positions this morning until I see some direction. However, I will quickly as possible protect capital if the Bears gain the upper hand and failure (reversal) price action begins to win the day. Let’s hope the end of quarter window dressing wins the day and as a result, the bulls charge upward!
Have a fantastic day and keep your caution flags waving.
Watch Morning Video | Right Way Options
Trade Wisely,
Doug
Spotlight Chart – OVAS
Targets Hit- 19%
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Set Up – Weak top, Bearish h pattern
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From a bull’s eye SPY:
Nice recovery of the SPY yesterday after the gap down and testing its 50-sma. There is a chance of minor follow through but I don’t think we see anything major. As a chart follower, the charts are suggesting the SPY and the market will see more correction.
Star light, star bright, first star I see tonight . . . . Unfortunately, this hopeful nursery rhyme doesn’t apply in the world of swing trading, where an Evening Star candlestick pattern indicates that very bad things are on the horizon. When traders spot this pattern, which is a top reversal signal, they know that lower stock prices may soon be on the way. However, the Evening Star candlestick pattern is a tricky pattern to identify, so investors must proceed with caution when they think they’ve sighted it. Scroll down to learn a little more about this hard-to-spot signal.
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
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Danger Zone
Good Morning Traders.
After the significant drop in the morning, I was pleasantly surprised to see the Bulls pull off a very nice rally recovering nearly all of the move lower. The big question is can it follow through? Last night the futures were up about 30 points, but they are now suggesting a lower open of 20 to 30 points. We are truly in the danger zone so be very careful.
On the Economic Calendar this morning we have the International Trade goods number that has the potential to move the market at 8:30 eastern. At 9 AM we have Case-Shiller report, and then 10 AM the consumer confidence number, both of which would have to be a pretty big surprise to move the market. Keep in mind; we have more Fed speakers today. On the earnings calendar, we have 78 companies reporting today.
My plan of action for today is to be very cautious. That was great to have the rally yesterday, but that rally stopped right at resistance levels. If the Bulls don’t step up and defend today, the Bears could regain direction and move use lower. I will likely sit on my hands until we have some price action clues established. I suggest extreme caution because we are in a very dangerous place where big moves are possible.
Watch Morning Video | Right Way Options
Trade Wisely,
Doug
The Bulls were able to win the battle yesterday in 3 of 4 indexes and as a result, are pounding on the door of resistance. The question that still needs to be answered is, will it open? As I mentioned yesterday, this is a battleground, and it seems like the first round was won by the Bulls. Most noteworthy is the NASDAQ which is very close to making new all time highs. For new or inexperienced traders this is a great chance to study possible topping patterns. Price action resistance is always of critical importance and therefore must be given respect as you plan the day ahead.
