Today’s trading sets up a classic scenario, a gap higher, sell-short in a down trend.
The only question is, do you have the correct plan for today’s open? Are you reading the propaganda from the 3-day weekend or are you reading your charts?
The $SPY is set to open at 2/3 of it’s 14 period average true range (8am). A push higher, off the positive open is a sell-short.
Do you have the guts to follow your plan and make the correct trade as prices move higher? A lower open is a different trade, this sets up another long.
A lower open suggests the buying from Friday is not exhausted, plus you will not be trading into a 3 day momentum extreme. The lighter volume and strong close on Friday, combined with today’s open, represent a trading setup you need to know.
The first push off today’s open price will dictate your trading plan for the day.
Pete’s Day Trading Notes:
- Friday we made a call the short side of the market was a lower probability. This meant the bullish tone on Friday was expected.
- Today’s higher open, 20 ema resistance sets up a sell-short after the first push higher off the open.
- I am not buying the warm and fuzzy bullish sentiment yet. A momentum trade on the long side maybe, but not ready to dig in a declare a bottom.
- Day traders should be focusing on daily order flow and the previous day’s range.
- To be honest I see a higher probability of stock prices producing sideways price action than a bounce.
Stock Market Today: Map of the S&P 500
(click the map for a full view)
–> Top 25 Proprietary Trading Secrets
Stock Futures Point Higher after Bullish Friday | 2-16-15
US stock futures Jan 15 – Business Insider:
The weekend* is over and stock futures in the US are higher.
At around 7:15 p.m. ET Monday night, Dow futures were up more than 220 points, S&P 500 futures were up about 29 points, and Nasdaq futures were up 73.
(*US markets were closed on Monday to observe the Presidents Day holiday. Asia and Europe were open.)
Dow futures rally 200 points as analysts call market bottom
U.S. stock futures moved sharply higher on Monday, mirroring solid gains in Asia where weak data spurred hopes that central banks will launch more easing measures.
Investors were also speculating whether a bottom has been reached after the recent selloff, with some analysts arguing the market is oversold in the short term.
Futures for the Dow Jones Industrial Average YMH6, +1.15% jumped 200 points, or 1.3% to 16,113, while those for the S&P 500 index ESH6, +1.17% gained 24.20 points, or 1.3%, to 1,882.75. Futures for the Nasdaq 100 index NQH6, +1.60% rose 71.5 points, or 1.8%, to 4,077.50.
Normal trading in the U.S. is closed for the Presidents Day holiday and futures will close for trade at 1 p.m. Eastern Time and open again at 6 p.m. Eastern. Trading in metals and energy futures also ends at 1 p.m
— CNNMoney (@CNNMoney) February 16, 2016
Chart Reading the SPY ETF
SPY closed strong Friday but traded much lower volume. Stock futures are set to open higher this morning, change from the open will dictate today’s trading bias.
(click the chart for a full view)
Technical Analysis | Charts of Interest
$JPM on finviz.com
#JPM | J.P. Morgan stock price rallied over 8% on Friday and is now testing the 20 ema on the daily chart. The next two bullish targets are $59.50 and $61.50.
(click the chart for a full view)
Stocks to Trade 2-16-16
Short-Term Trading Momentum:
Positive the last 20 and 5 trading days | closed 2% higher from the open: WYNN, LVS, SKX, WWAV, MAR, PCAR, INTU, AKAM, EOG, CVX, SLB, TJX, CELG, MMM, CHRW, XOM, PEP, MCD
Negative last 20 and 5 trading days | closed 2% lower from the open: tsla, fslr, tso, rtn, do, lnkd, mos
Quarterly Order Flow:
Bullish Stocks to Trade: CB, LULU, FAST, CAM, MMM, CHRW, HON, XOM, KMB, K, PG, AEM, KORS, PM, TSN, NEE, DUK, ED
Bearish Stocks to Trade: atvi, mos, lnkd, trip, tso, cbs, vtr, lly, ba, tsla, mcp, myl, adi, ea, stj, adbe, dfs, teva, cop, pnc, gs, vlo, mpc, epd, incy, vrtx, lnc, pru, met, c, bidu
20 Day Breakdown: atvi, holx, lly, tso, vtr
20 Day Breakout: ROVI, WYNN, SKX, CTL, GT, AKAM, ALL, PAYX, WM, K, O
2x Normal Volume: ATVI, DVN, MYL, BA, HES, MOS, WYNN, FTI, GS, IR, PRU, TOT, ITC, O, TRGP, INCY, TRIP
Inside days: aapl, fb, myl, emc, ba, mos, gm, jnj, dal, tsm, jnpr, mdt, utx, rai, tyc, bhi, pld, hca, endp, lnc, sabr, rcl, adt