Bullish Sentiment Arrives | Stocks to Trade 10-5-15

bullish sentiment arrivesThere were signs in the market internals on Friday that a bounce was coming, despite the pounding after a weak jobs report.

To succeed as a trader, you need to notice more, especially as a day trader. You need confident, fast decisions. The more pieces of the puzzle you can put together, the more conviction you will have in your strategy on a trade-by-trade basis. In our Live Trading Room we call this “making an argument.” The stronger your argument for the trading scenario, the more flawlessly you will trade.

We discuss this often by saying you need to scan charts, to see more than what’s obvious in the indices. A good analogy is driving a car. As you gain experience you see more and make better decisions.

Friday morning the TRIN started trending lower, while the market was still heading lower (this is a divergence). The TRIN is a leading indicator. It shows us up-ticking stocks versus down-ticking stocks, as a ratio with up-ticking volume versus down-ticking volume. Like the VXX, it moves in the opposite direction of the stock market price action.

TRIN reference points are 1.2 and .80. Above 1.2 is considered bearish, below .80 is considered bullish. The true reading you should monitor is the trend of the TRIN, because the absolute number can be misleading when the market gaps.

You can see this best on a 5 minute chart from Friday. This is a great lesson for you to print out, and put in your trading journal. Remember, the more distinction you can make, the more conviction you will have to accept risk. The TRIN/price action divergence, at the very least, kept you away from an aggressive sell-short.

*Plenty of free trader training here if you are looking for a new edge.

Stock Market Today: Map of the S&P 500

(click the map for a full view)

Bullish Sentiment Arrives

Day Trading Game Plan: The SPY ETF Outlook

The SPY took a beating pre-market on Friday after the weak jobs report was revealed. The stock market was set up perfectly for a bearish day into the weekend. Not so fast…

Traders bought the market implying an interest rate hike, now looks less likely. The SPY ends up posting a bullish engulfing candlestick on solid volume. Now what? The SPY is in a 6 week trading range. We are still trading a day-to-day bias.

Prior to the China meltdown, price action in the SPY was a  essentially a 6 point trading range between @ $206-212. Currently all key moving averages are in a downtrend. This means if you are long, you are making day trading decision against the current bias. Nothing wrong with that, but make note you are trading today’s price action, not long-term order flow.

(click the chart for a full view)

Bullish Sentiment Arrives

Bullish Sentiment Arrives | Stocks to Trade 10-5-15

Pete’s Notes:

  • Bullish engulfing candlesticks abound.
  • Bear flags are not hard to find, the only problem with conviction on the short side is many of them are one-day pull-backs. Need at least two solid days to feel comfortable.
  • On the bullish side, many stocks above key moving averages but not close to be considered an obvious up trend. (MCD is a good example).
  • I am still in day trading mode. Not sure how a stock trader can see anything but bearish set ups or trading ranges.

Charts in Focus

XPO Logistics, Inc. XPO

Very clean bear flag with a higher open into the 20ema. If XPO trades through this level this morning, $30 is the short target.

(click the chart for a full view)

Bullish Sentiment Arrives


Bullish Sentiment Arrives


Bullish Sentiment Arrives | Stocks to Trade 10-5-15

Earnings in play today > 1M avg shares:

Relative weakness to yesterday’s bullish market: cme, pbf, ual

> 20sma, positive week and closed 2% higher from the open: JD, NKE, PXD, SNDK, TSO, CRM, ADBE, LB, NFX, HFC, UNP, LLY, VLO, LYB, COP, CLR, ACN, CVX, AMZN, MCD, XOM, MPC, GOOGL, QIHU, YUM, PSX, MAR, NFLX, BIDU, TWX, MDT, EOG, PPG, APA, OXY, BABA, FSLR, SCTY, HES, MBLY

<20sma, negative last 5 days and closed 2% lower from the open: cme, ual

Bullish Ideas ATR/Volume/Price: NKE, TSO, CRM, ADBE, LB, HFC, LLY, VLO, ACN, UA, AMZN, MCD,

Bearish Ideas ATR/Volume/Price: hznp, amba, gpro, mnk, lulu, vrx, xpo, qrvo, lng, cf, ete, wpz, rrc, stx, etp, wynn, wmb, feye, uri, mon, myl, lvs, ual<50, abbv, apc, amgn, celg, hot, utx, hon

Weak Stock Weak Close: ual

Strong Stock Weak Close:

Weak Stock Strong Close: schw, c, mrk, wtr, ms, lvs, ete, wynn, hal, slb, cbs, gpro, myl, bbt, wmb, cat, mos, celg, abt, aig, vrx, pypl, bax, mur, abbv, pcar, hcnp, vod, emr, teva, apc, amgn, agn, xpo, utx, gs, bkd, zts, m, ip, hon, lulu, ivz, cf, stt, abc, bxlt, endp, oke, lbtya, wpz, tyc, mon, mjn, cah, ncr, hot, grub

Strong Stock Strong Close: MSFT, KO, NVDA, ATVI, LLY, P, NKE, MCD, TSN, ADBE, UA, BBY, LB, MSI

20 day Breakdown: axl, cme, gncr, ppc

20 Day Breakout: JKS, EW, CUBE, WDAY, DLR, AEM, SNDK, PPL, JNPR, HRB, WFM, JD

2x Normal Volume: BAC, HLT, SCHW, MRK, MS, LVS, ETE, WYNN, WFM, CBS, HRB, OLN, MOS, FTI, VRX, MUR, MPEL, AMTD, PCAR, PAYX, ETP, RAX, XPO

Watch List Longs: KO, SBUX, MO, MCD, BBY, ADBE, MSFT,

Watch List Short: mrk, ms, hal, slb, abt, amgn, hon, cof, adm, tol, nue, m, wynn, hpq, lvs, vz

Inside days: duk, so, ed, xel, nxpi, xl, bwa, fe, eix, feye, fit

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