A lot of concern about the selling pressure, but if you’re a day trader, this volatility is exactly what you want to start the year.
It’s important to make the distinction between your long-term account and your day trading. Your mind can play games with you when you have each trading business in the same open P&L window.
If it’s possible keep them separate. Short-term trading has nothing to do with balance sheets, it’s about volatility and volume.
The key to making money in this environment is getting clear on your scanning criteria. When you scan, you only get a list of stocks unique to your resources and goals.
Don’t try to trade GOOGL or AMZN, if the swings are too much for you. If you do, you will be trading scared.
The baseline criteria I recommend is:
- Average 2 million shares traded per day.
- Average true range of $1.50.
- Price above 15. (You can put a max here as well if you like)
These criteria will give you a solid list of stocks with liquidity and profit potential.
Stock Market Today: Map of the S&P 500
(click the map for a full view)
SPY price action found support from a trend line going back to 2011 and October 2015. The short-covering rally can be a fast move to the upside, but unless we can trade and stay above $200, the short-sale will be the better trade.
Let’s give the bulls the next 2 days to see what they can do. We need to see over 150 million shares traded in the SPY, and positive days, with a strong close, to think the bulls are back.
(click the chart for a full view)
- The market found a short-term bottom yesterday afternoon as the $TICK readings to the negative side got progressively stronger. This means less selling and short-covering, it does not mean new buying yet.
- Oil continues it’s downward slide.
Technical Analysis | Charts of Interest
RAI broke out of resistance, paused and then gave us another solid trend day yesterday, on a day the market witnessed heavy selling. $49.50 is the first target with new multi-year highs above that level.
(click the chart for a full view)
Equities Find Short-Term Bottom 1-12-16 | Stocks to Trade
> 20sma | positive the last 5 days | closed 2% higher from the open: GME, M, RAI
< 20sma | negative last 5 days | closed 2% lower from the open: fit, rax, wmb, rlyp, paa, apc, sm, vrx, gpro, akam, cah, celg, amba, dvn, feye, mur, csiq, epd, wdc, mos, lyb, cf, stx, lng, bx, dd, abbv, oxy, yelp, cat, zts, eog, hal, sdg, scty, pxd, amgn, car, oke, bofi, cvx, wynn, rio, grub, cyh
Bullish Ideas ATR/Volume/Price: FSLR, NEE, BXLT,
Bearish Ideas ATR/Volume/Price: clvs, paa, apc, ua, vrx, cah, celg, amba, dvn, wdc, lyb, cf, lng, dd, abbv, oxy, cat, eog, pxd, amgn, dow, save, cvx, wynn, xom, nfx, biib, cmi, jnj, mon, unh, slb, stt, cyh, bhi, fl, avgo, endp, crm, lvs, mmm, mnk, utx, myl, ba, ups, adsk, ilmn, pnc, kmx, lrcx, dis, ma, mar, cof, acn, gs, jwn, unp, aapl, ea, thc, fosl,
Weak Stock Weak Close: rax, paa, apc, akam, cah, celg, amba, dvn, csiq, wdc, mos, cf, stx, lng, mjn, bx, clr, dd, abbv, oxy, cat, zts, eog, hal, fti, pxd, amgn, car, cvx, wynn, cyh
Strong Stock Weak Close: BXLT, AEM
Weak Stock Strong Close: dlph, hds, nxpi
Strong Stock Strong Close: RAI, CCL, O, MO, PM
20 day Breakdown: lbtya, apc, ua, akam, cah, celg, amba, dvn, cop, mos, apa, hes, hp, lyb, abc, stx, mjn, bx, oxy, vfc, cat, jd, pxd, mmc, rio, bmy, mpc, gps, met, cma, ben, payx, jci, ba, ilmn,
20 Day Breakout: M, NEE
2x Normal Volume: BXLT, COP, CELG, UA, FIT, TWX, BX, KSS, LBTYA, RIO, AKAM, MJN, ABC, CAH, PAYX,
Watch List Longs: KSS, MO, PM, WMT, MCD
Watch List Short: akam, dd, dow, wynn, ual, luv, lvs, qcom, len, intu, hd, c, txn, low
Inside days: aapl, csco, nflx, wfc, gm, wmt, kss, atvi, rrc, txn, hd, cbs, mcd, mgm, cvs, ip, bby, mxim, mar, coh, dfs, xel, viab, tjx, ea, bbby, kim, lrcx, fosl, acn, adbe, wm,