Stock Traders Seek Capitulation Selling 1-14-16

Stock Traders Seek Capitulation Selling 1-14-16For some reason day trades want to catch a bottom instead of riding the order flow short…

I guess that’s because many stock traders are long only. They don’t like to sell-short. That’s OK, but that doesn’t justify buying a stock with vicious selling volume. It’s OK to be in cash.

The SPY and many stocks produced a bearish engulfing candlestick yesterday. The odds of a lower open are 90%. The odds of a lower close are less than 50%.

Draw simple trend lines during the day to make sure you are trading with the trend. If price action on the 5 minute chart begins trading above the trend, and the current hour is positive, it’s a sign we may have a short term bottom. <—- (CLICK THE CHART ABOVE FOR A FULL VIEW)

Stock Market Today: Map of the S&P 500

(click the map for a full view)

Stock Traders Seek Capitulation Selling 1-14-16

Day Trading Game Plan: The SPY ETF Outlook

SPY $190 is the level to watch this morning. Day traders looking for a quick momentum trade long, are planning for a breakout above this level. If the first move in lower, then this sets up $190 as the first profit target on a long. SPY $187 is the next support.

These are momentum ideas only. Order flow in the spy is to the short-side. If you’re day trading the SPY long, make sure the current hour is positive.

(click the chart for a full view)

Stock Traders Seek Capitulation Selling 1-14-16

Pete’s Notes:

  • Capitulation is a funny thing. It means the end of a move, but too many stock traders are looking to buy beaten down stocks. That is a viable trading strategy but if it’s your sole focus you missed some great money on the short side.

Technical Analysis | Charts of Interest

AEM Agnico Eagle Mines LTD

Buying Opportunity

AEM is one of the few stocks with decent volume trading above the 20 ema and with a strong close yesterday. The stock has $1 profit target from yesterday’s close and a much better reward potential to $33.75.

(click the chart for a full view)

Stock Traders Seek Capitulation Selling 1-14-16

Stock Traders Seek Capitulation Selling 1-14-16

> 20sma | positive the last 5 days | closed 2% higher from the open: AEM

< 20sma | negative last 5 days | closed 2% lower from the open: tso, mbly, mpc, vlo, nflx, etp, car, swks, yelp, apc, thc, mar, amzn, ctrp, trip, abbv, ual, lvs, nxpe, aer, gild, tsla, wdc, aal, bhi, dal, gs, oke, fb, len, dvn, amgn, googl, ea, bmy, lrcx, cof, unp, cop, kmx, dis, ba, crm, jpm, lng, bbby, aapl, ups, ma, cf, nbl, dhr, akam, v, cah, utx, pru, cci, slb

Bullish Ideas ATR/Volume/Price: BXLT, NEE

Bearish Ideas ATR/Volume/Price: tso, mbly, mpc, hfc, etp, car, swks, apc, thc, mar, celg, abbv, ual, avgo, nwl, aer, gild, wdc, tsla, bhi, dal, gs, len, dvn, bmy, lrcx, cof, unp, kmx, dis, lng, bbby, aapl, ups, hes, nbl, akam, cah, utx, slb, cat, oxy, amba, apa, fit

Weak Stock Weak Close: tso, mbly, mpc, vlo, nflx, etp, car, swks, yelp, apc, thc, mar, amzn, ctrp, trip, abbv, ual, lvs, nxpe, aer, gild, tsla, wdc, aal, bhi, dal, gs, oke, fb, len, dvn, amgn, googl, ea, bmy, lrcx, cof, unp, cop, kmx, dis, ba, crm, jpm, lng, bbby, aapl, ups, ma, cf, nbl, dhr, akam, v, cah, utx, pru, cci, slb

Strong Stock Weak Close:

Weak Stock Strong Close:

Strong Stock Strong Close: AEM

20 day Breakdown: jpm, cop, apc, vlo, clr, dvn, bmy, mpc, adsk, hd, utx, ual, amzn, wdc, mbly, swks, nwl, cyh, wpz, mar, cof, gs, cf, pru, thc, car, aer

20 Day Breakout: M

2x Normal Volume: WSH, MS, MET, ESRX, COP, BXLT, APC, ETP, VLO, ADSK, BWA, NWL, HES, PSX, GT, TSO, DLPH, PRU, MCHP, ACE

Watch List Longs: mo, MCD, KSS, WMT, T

Watch List Short: wynn, ual, lvs, low, dal, len, c, intu, txn, dd, dow, akam, nue, tol, qcom, ms, hd, bhi, bmy, bk, cof, hal, cop, dis, jpm, axp, mrk, pru, jnj, slb,

Inside days: etp, twx, rrc, pg, eog, gps, wy, ppl, xel, fti, d, gme

About the Author

Pete is a full-time trader and mentor since 2000. Author of Equity Trader 101 and the Order Flow Method. He is dedicated to help self-directed traders to bust through the six-figure level.

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