Good morning everyone

Do my eyes deceive me?  A market open without a major gap.  A rare occurrence of late to be sure!  As nice as that is to see the fact is the market continues to be down-trending and locked into a very small chop zone.

I plan to remain cautious largely sitting on my hands patiently waiting a market direction to appear.  I certainly understand how frustrating this can be however it’s far better than bleeding capital daily in this chop.

The earnings reports are picking up so I highly suggest making sure you know when companies you hold are reporting as well as checking those you are thinking of entering.  Failing to do so can inflict pain you really don’t want to experience.

Trade Wisely,

Doug

Click Here to Watch the Morning Video

Good morning everyone

The market is very happy this morning with the big earnings beat from NFLX.  The market was expecting less than a $10 move but the stock is gaping nearly $20 higher this morning.  At 8:30 we have a potentially market moving CPI reading.  There are a couple other reports that can move the market but it’s unlikely that they will.

Just because the market is gapping up does not mean we should get all excited and chase this gap.  Even with the opening pop, it should be noted that nothing has really changed as of now.  The market is still in a downtrend and we continue to be stuck in a very narrow range.  How many times have we seen in the last month a gap up that has been sold into over the next couple days?  Fool me once shame on you, fool me twice shame on me.

There is absolutely no need to rush.  Keep your emotions in check by planning your trades carefully and waiting for the trade entry to come to you.

Trade Wisely,

Doug

Click Here to Watch the Morning Video

Good morning everyone

As I write this the Dow futures are pointing toward a negative open but some big profile earnings reports prior to the open, a couple big economic reports after the open and Fed speak, how we close the day is anyone’s guess.  What we do know as fact is that Friday left us with a bearish candle on the DIA and the SPY once again reacting negatively to the upper boundary of the downtrend.  On the other hand, we are also near the support that has kept us locked into a very narrow range of chop.

Being bullish or bearish at the moment would be nothing more that guess reflecting your personal bias.  Be careful because anything is possible with the potential for very large moves in price.

Personally, I want to stay very small and limit my trading until this chop has resolved into an uptrend or downtrend.  I really don’t care which direction.

Keep in mind after the close we kick earnings of the big tech’s with IBM and NFLX.

Trade Wisely,

Doug

Click Here to Watch the Morning Video

Good morning everyone

It’s Friday!  This has been a very tough week, and I for one will be very happy to have it fade into memory.  Today we have have had some big banks reporting earnings.  The reports were positive and so we gap once again in the pre-market.  Yesterday’s open to today’s open is nearly 200 Dow points apart.  Feeling chopped up?  You’re not alone.

We have 3 Fed speakers today which could easily reverse the happy sentiment we see in the futures this morning.  We also have several economic reports that could move the market around this Friday. Be careful!

The RWO E-Learning normally the 3rd Saturday will be postponed until next Saturday due to my father-in-law’s funeral.  Also, I will be conducting the RWO room today in room 1.  The password will be removed so everyone can attend.

From lunchtime on I will be hit and miss today with lots of folk coming in for the funeral.  If you send me an email or PM’s there is a very good chance I won’t be able to get to them.

I wish you all a fantastic weekend.

Trade Wisely,

Doug

Click Here to Watch the Morning Video

Good morning everyone

The good news is we no longer have to worry whether or not the support will be tested.  That has clearly been answered and we have to move on the next question.  Will support hold?  I suspect with some of the big banks reporting on Friday and early next week that hope of positive numbers will prevent the big guys from getting full-on bearish just yet.  That, however, doesn’t mean that we could see a quick move below support simply to sweep out stops so don’t rush in if we see a little bullish push right at the open.

If you are a long-only trader let me suggest taking the rest of the week off.  Wait to see if earnings can, in fact, break the downtrend.  Until that occurs the bears are in control and they love to steal the lunch money of traders high on hopium predicting a bottom has been made.  You risk almost nothing by waiting for proof except maybe bragging rights if you do happen to get lucky and pick the bottom.  If you are that kind of trader it’s better to go to Vegas because there will at least bring you free drinks to dull the pain of watching your money disappear.  That may sound a bit harsh but it’s the truth.  You can thank me later.

Trade Wisely,

Doug

Click Here to Watch the Morning VideoP

Good morning everyone

First I would like to say thank you to everyone for all the kind words, prayers and well wishes that I have received on the passing of my father-in-law.  The members of this room are the best and over and over proves itself as more than a trading room but an extending family.  My wife Connie and I are very thankful to be a part.

Today we had a couple fed members speaking and at 2 PM eastern we will get the minutes of their last meeting.  It’s possible we could see volumes diminish after the morning rush while we wait.  Personally, I would be surprised if we find out anything we don’t already know but anything is possible.

Yesterday turned in a bearish evening star pattern right at the 50 SMA on both the DIA and the SPY.  Lately, we have seen big moves down rejected by big reversals the following morning.  Unfortunately, we are not seeing that this morning as the futures remains flat to slightly bearish.  To me, this would suggest more downside moves are likely within the next couple days.  The big question if that occurs will be if the price support is strong enough to hold.  I think we will soon find out.

With several of the big banks reporting Friday morning, a reversal, if there is one, would logically come at that time.  That being said, we also have to acknowledge that logic is not one of the markets strong points.

Trade Wisely,

Doug

Click Here to Watch the Morning Video

Good morning everyone.  Today is the official kick-off to earnings session with AA reporting before the bell today.  I urge everyone to take the time to check when a company reports before adding new positions as well as those you are currently holding.  The last thing you want is to be reminded of an earnings report with a big gap down in price on stocks you own.

Yesterday the market left us shooting star candle pattern at the 50 SMA on the DIA.  Not exactly inspiring confidence…however, it’s all about the follow through.  A shooting star pattern on its own means nothing unless there is a follow through with a bearish candle printed today.

Futures were bearish most of the night with Asian markets closing mixed but the Euro markets continue to remain in the green so far this morning.  My suggesting is to move slowly this morning,  Let,s give the market 20 to 30 minutes to process before adding new positions.

Click Here to Watch the Morning Video

Good morning everyone.

Today is Columbus Day and which means banking, government agencies and most of the big financial centers will be closed today. What does that mean? After the morning pop, I expect the market to get very choppy and volumes to drop off quickly. As of now, the futures seem happy suggesting a gap up of about 60 points. At first glance, that seems exciting but then we remember all that really does is recover the losses from Friday and really doesn’t change anything.

We must see a close above resistance and then it must prove it can hold it as support before there is any reason to get very excited. It would be wise to keep that in mind if or when you are considering new positions. If you think about it a light volume day would be the perfect time to set up a head-fake breakout only have it reversed when everyone comes back to work on Tuesday.

Although I’m very happy to see some bullishness today trusting that it’s real after more than a month of big chopping price action is another story.

Trade Wisely,

Doug

Click Here to Watch The Morning Video

Good morning everyone. It’s Friday!  Today we finally get the employment situation number and will any luck we will see the market pick a direction  and finally break out of this chop.  After the number is released we will likely see some very wild trading in the futures that could flip directions several times before settling down.  I’m expecting a gap open that could be pretty big so I will just sit quietly and watch the amateurs duke it out for awhile before making any big decisions on positions.

In my option, the worst thing that could happen today would be having the market  remain stuck and we would have to look forward to yet another week of small range chop.  Keep in mind there are 4 Fed members speaking today so if the number is a surprise in either direction plan on them chiming on interest rate talk.

Keep in mind that Monday is Columbus Day and although the markets will be open banks and other institutions will be closed.  Volumes could be very light as a result and it might be a good day to jut go fishin’.  Have a fantastic weekend my friends.

Trade Wisely,

Doug

Click Here to View The Morning Video

Good morning everyone. I hate to say it but today I am expecting a whole lot of nothing.  After the morning rush, I fully expect the market to settle into a very small range chop as it waits for the Employment Situation number Friday morning.

Sadly there is not much we can do to trade the Friday number because it will happen pre-market and the big action will likely occur before the open.  I personally see the potential for a big gap in either direction tomorrow that we will obviously not be able to control.  Thus, my suggestion is to manage the trades that you are in and avoid putting on additional risks.  If fact if you are concerned there is nothing wrong with taking gains on trades that currently have profits and then just sit back and watch with your capital protected.

Trade Wisely,

Doug

Click Here to Watch the Morning Video