Stock Market Bears Face Moment of Decision

SPY ETF Chart 1-7-19

SPY ETF Chart 1-7-19

Stock Trading Ideas 1-7-19

These charts of the SPY ETF and Goldman Sachs Group (GS) show clear bearish order flow.

The bears open this week at a crossroads. Do they dump more supply on the stock market expecting continued lower prices, or do the cover shorts fueling a new rally?

The decision we need to make this week centers around conflicting forces. Bearish order flow but recent bullish momentum. If you trade order flow and follow the smart money (like I do) we are still looking for places to sell short.

Prices are below all key moving averages telling us the smart money is betting on the stock market moving lower. But was that a short-term bet? Was that bet simply on the FOMC raising interest rates?

How does this affect your trades this week?

It means the smarter trades, the high probability trades are to the down side. BUT — If your stocks are trading above the open price, let them go. Do not sell them. 

There comes a time when you must learn to wait. Wait for order flow, daily momentum and today’s price action to “be on the same page.”

So if I’m looking to sell today, I want prices to be trading below today’s open price and ideally, below Friday’s high and Friday’s close. This is my ideal situation. My “perfect trade for today.”

I’m forcing my stocks to fit this criteria, or I stay away. This is the type of game plan that separates those who get paid, from those who stay broke.

GS Goldman Sachs Chart 1-7-19

GS Goldman Sachs Chart 1-7-19

More stock market carnage could force Trump to make a China trade deal, expert says

The U.S. and China are unlikely to reach a full deal at the end of their 90-day ceasefire on tit-for-tat tariffs, but a sustained decline in markets will push President Donald Trump to close a deal, an expert told CNBC on Monday.

Washington and Beijing are meeting for trade negotiations at the vice ministerial level in the Chinese capital on Monday and Tuesday — and markets have been keeping a close watch on those developments amid growing concerns about China’s slowing economy and its impact on U.S. businesses.

How to choose the right stocks to day trade after the stock market opens. Behind the scenes to a private coaching session.

Housing Bear Who Called 2018 Slowdown Says Worst Yet to Come

James Stack, who predicted the 2008 real estate crash and nailed last year’s housing slowdown with uncanny timing, is back with some bad news for 2019.

“Housing could be heading for its worst year since the last housing crash,” Stack, 67, said in a phone interview. “Expect home sales to continue on a downward trend in the next 12-plus months.

And there’s a significant downside risk to housing prices if a recession takes hold.”

Last January, Stack was practically alone when he warned rising mortgage rates would expose housing’s affordability problem and “the risk that today’s highly inflated housing market will again end badly.”

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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