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
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
Good Morning!
The bears are hungry, and it looks like they plan to fed well today. The failure of Congress to pass a new healthcare bill is gaping the market sharply lower this morning. The selloff began in Asian markets last night and went all around the world. Quietly I was hoping why would pull off a last minute deal before today’s open but apparently they have given up at least for now.
The economic calendar events will not provide us any help today because all have are a few bond announcements and a couple of Fed speakers that still have something say after talking all last week. On the earnings front, we have 50 companies reporting today so stay on your toes.
The first order of business for me this morning is to manage the positions that I’m in. We have some very nice profits in RWO trades so let’s make sure we are taking care of that business first. Don’t act out of panic but clearly think through each position and respond as with a business frame of mind. We will now start looking for some bearish positions, but we must remember that the 1st quarter is coming to an end and the possibility of an end a window dressing rally is possible.
Have an awesome day!
Watch Morning Video | Right Way Options
Trade Wisely,
Doug
Top of the morning friends.
It looks like we are going to start today a little bearish on the news that the president stirred the pot with Mexico and Australia during the evening giving the market another shot of the unknown. Facebook reported well after the close yesterday but also mentioned they lost a legal battle that will cost them 500 million. The company however, is still showing some gains this morning. I’m pointing out FB just as a reminder how earnings reports can often be much more than just a report on their books. Get caught on the wrong side of one of the surprises can have big unintended consequences for the short term swing trader.
Today we have the normal jobless claims and productivity numbers on the calendar and more than 200 companies reporting today. AMZN is the big hitter that will report after the close today.
With the Employment Situation report coming out Friday Morning I’m expecting the price action today to be very light and choppy after the morning rush. Today may turn out to be a good day to just sit back and work on building shopping lists and making preparations for your next trade rather than actually entering new positions.
Everyone have a great day!
Trade Wisely,
Doug
Click Here to Watch the Morning Video
Good Morning, it’s hump day and we have a busy market day ahead so I hope everyone is well rested and ready to rumble.
As we had hoped AAPL turned in a very good earnings report giving the bulls something more to think about than politics. Futures are suggesting a nice pop up at the open so far and all the major indexes are showing positive signs of holding price support at least for now.
We have a bunch of economic reports on the table today and some of them do have the potential of moving the market. The biggest and most important will be a 2 PM EDT when we hear from the FOMC. No one is expecting a change in the statement but if during her press conference Yellen begins to sound hawkish then the bears will have something to chew on so be careful.
After the morning rush don’t be surprised if the market goes very quiet as it waits for the FOMC. Also keep in mind we have over 130 companies reporting today we much remain on our toes when it comes to picking new trades.
I wish you all great day of trading.
Trade Wisely,
Doug
Click Here to Watch the Morning Video
Good Morning traders!
Monday was a bit of a roller-coaster ride and it was easy to become a little overemotional about the price action. Please watch the video because I explain a little on how to avoid making those emotionally based decisions.
Today we have several economic reports that have the potential to move the market but I think it is unlikely that they will. We also have the FOMC meeting beginning today so keep in mind that normally the market can become very quiet while it waits for their decision on Wednesday afternoon. Personally, I think the market driver will be the 130 plus earnings reports happening today with the granddaddy of them all AAPL reporting after the market close. I may be wrong but I think AAPL has had enough time to make some course corrections and I expect we will see a very good report today.
Although at this time I don’t think there is a need to panic about a major correction I do think it’s very important that you are managing the positions that you are in. Remember you can always buy a stock back and for the cost of a commission, there is just no need to hold a stock that is not performing as you had expected and breaking down. Raise your caution level on buying new positions slightly until we have a few more clues on the direction of the overall market.
Have a profitable and productive day!
Trade Wisely,
Doug
Click Here to Watch the Morning Video
Good Morning friends and Happy Monday!
I hope this note finds you all happy, healthy, rested and ready to kick off another week of trading. We have a lot going on this week with earnings really ramping up and some the heavy hitters such as AAPL and AMZN reporting this week. We also have FOMC minutes and the big employment report to deal with this week which truly makes anything possible.
Futures this morning are looking lower seeming to show disappointment in the president’s travel ban. Weekends always seem to have an element of danger to them because you just never know what might happen while the market is closed. This is a good example as to why I don’t like loading up on stocks on a Friday and favor taking profits and cleaning up the portfolio ahead of a weekend.
We have a couple report on the economic calendar this morning but personally, I doubt very much that they will really move the market very much unless they are a big surprise. There are 68 companies reporting today so be mindful of that making sure you check reporting dates before making a purchase adding new risk.
Have an awesome day!
Trade Wisely,
Doug
Click Here to Watch the Morning Video
Good Morning friends and Happy Friday!
Why is Friday always happy? Because that is the day we make an effort to put profits in the bank paying ourselves for the hard work of the week. Never forget that part of successful trading is learning to take profits consistently.
Futures are basically flat this morning as we wait for a couple big economic numbers and earnings reports. At 8:30 eastern we will get a reading and Durable Goods Orders and GDP. I’m expecting both to be positive but you never know anything is possible. I personally think these numbers will set the market tone for the day. Fridays and mostly been up days with all the good feelings heading into the weekend. However, you never want to count on that so make sure you are managing the positions you are in first.
As you know from time to time I will add new positions on a Friday but as a general rule, I lighten my risk heading into the weekend rather than add. It all depends on the trade and the attitude of the overall market.
Please meet me in the RWO room right after the open so we can make some decisions on the MSFT position after the positive earnings and the morning gap up. See you there!
Everyone have a fantastic weekend!
Trade Wisely,
Doug
Click Here to Watch the Morning Video
Good Morning traders, it’s Thursday and the market is still happy!
I always have a little worry in the back of my mind after a big breakout move that the market will reverse with a nasty head fake. However, the positive energy we started yesterday translated around the world with all the major world markets getting on the bullish bandwagon. This morning we have already seen some very good earnings reports that we can only hope will keep that warm and fuzzy feeling going for a follow through day.
We have the normal International trade and jobless claims numbers that come out at 8:30 eastern time and later in the morning we have housing sales but I my guess is they would have to surprise pretty badly to move the market. There are 165 companies reporting today so make sure you are positioned correctly based on your risk tolerance for those reports. I mostly will avoid an earnings report altogether.
I am bullish but I will try to avoid over bullishness until our new levels of market support are tested and hold with buyers reacting to those supports. If we are so lucky to have that occur we could have great trading all the way into summer. Only time will tell.
Have a fantastic day and remember to put some money in the bank as we head toward the end of the week.
Trade Wisely,
Doug
Click Here to Watch the Morning Video
Good Morning RWO!
The market made such a nice move up yesterday on the back of the new president’s decisions and it’s setup to power higher again this morning with futures pointing to a nice gap up. Dow 20K seems to be back in the cards and even higher. Yesterday the QQQ made and all-time closing high and it is also showing more gains this morning.
Mortgage apps showed a surprise increase of 4% last month even the midst of rising rates. Personally, I see that as very positive because the consumer is showing a level of confidence in the future that we haven’t seen for some time. Let’s hope it’s not a flash in the pan and that we are seeing the beginning of a positive emergence of actual growth. We will get a reading on the Oil status this morning. A story out yesterday said OPEC’s efforts have started working to stabilize the sector. Let’s hope we begin to that in the actual number of supply today.
For a couple weeks, I have been talking caution but I now think it’s time to lift some of that caution and perhaps be slightly more aggressive. We still have the upper resistance to breakout and hold as support so we are not totally out of the woods just yet but I think the price action is suggesting a new wave of upside momentum could have begun yesterday.
I wish you all a productive and profitable day!
Trade Wisely,
Doug
Click Here to Watch the Morning Video
