Stock Market Forming Island Top Chart Pattern


RH Box versus Momentum: Click to Enlarge

A potential change of trend is the most challenging to trade.

The trend is still in place but the momentum is gone. You are doing the “right thing” by trading only in the direction of the trend but you are losing money.

How do you stop the losses? Easy. By recognizing when your stock “goes in a box.” It could be one day, it could be 3 weeks but you must train yourself to spot when momentum is missing.

Momentum is easy to identify: (reverse for short-sales)

  • Your stock has higher-highs and lower-highs,
  • Closes above the open.
  • Closes net positive.

When this pattern is in place, you’re golden when in the direction of order flow. When it stops, the institutions are taking a break. So should you. Wait for the breakout.

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Pete’s  Day Trading Notes:

  • First negative day in a while where most of the S&P 500 stocks were negative.
  • $IBM continues to be a beast, time to book profits into resistance.
  • $AXP, V and MA all strong with room to go.

U.S. stock futures retreat ahead of jobs report

U.S. stock futures on Friday pointed to a moderate drop at the open, as investors waited for a much-anticipated monthly jobs report.

The stock market looks set to start the new month and new quarter on a downbeat note, after the S&P 500 gained 0.8% in the first quarter.

S&P 500 futures ESM6, -0.37%  fell 7.50 points, or 0.4%, to 2,044, while Dow Jones Industrial Average futures YMM6, -0.31%  lost 58 points, or 0.3%, to 17,537. Nasdaq-100 futures NQM6, -0.46%  shed 21.25 points, or 0.5%, to 4,455.

The nonfarm payrolls report for March is due at 8:30 a.m. Easter Time. Economists polled by MarketWatch forecast 203,000 jobs were added, as the unemployment rate stayed at 4.9%.

“With NFPs on the calendar for today, markets can’t really be blamed for the cautious start to the new quarter,” said Chris Beauchamp, senior market analyst at IG, in a note.

“In recent months NFPs have been the calm before the selling begins, and so the week or so before earnings season kicks off in earnest may provide bears with their best chance in weeks to push indexes lower.”

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Stock Market Today: Map of the S&P 500

(click the map for a full view)

SPY Heatmap 4-1-16

SPY Heatmap 4-1-16

Stock Market Forming Island Top Chart Pattern 4-1-16

Stocks Quiet; March Gains Best In 5 Months

Stocks finished quietly mixed Thursday ahead of Friday’s jobs report while scoring solid gains for the month.

The Nasdaq closed barely higher, while the Dow Jones industrial average and S&P 500 each dipped 0.2%. All three major indexes wrapped up March with a 7% advance, the biggest gain since October.

Volume was lower across the board for the session vs. Wednesday, according to early figures. Winners narrowly outpaced losers with a 7-5 margin on the NYSE and by 9-7 on the Nasdaq.

Biotech, generic drug stocks and automakers outperformed in the stock market today, while gold miners, travel bookers and car dealers lagged.

Medivation (MDVN) surged 23% in healthy trade, retaking its 200-day moving average for the first time since mid-July. Shares spiked amid rumors the San Francisco-based biotech hired bankers to fend off suitors.

WebMD (WBMD) gapped up and soared 5% to its highest level in more than eight years. Shares are well extended past a 58.35 buy point initially cleared March 4. The online health care content provider will replace SunEdison (SUNE) in the S&P 400 midcap index after the close Friday.

LendingTree (TREE) led the IBD 50 with a 6% pop. Volume was soft as the stock climbed past a 97.85 buy point of a cup with handle. Mizuho on Wednesday began covering the online lending service provider with a buy rating.

Also on the IBD 50, BroadSoft (BSFT) rose nearly 5% in fast turnover, following through on a Tuesday breakout past a 39.20 handle buy point. It remains in buy range, 3% above the entry. The telecom software and service provider has stepped up profit and sales growth the past two quarter

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Chart Reading the SPY ETF

$SPY forming an island top chart pattern. Also four out of the last six trading days have closed below the open. Be stock specific if you are long only.

(click the chart for a full view)

SPY 4-1-16

SPY 4-1-16

Technical Analysis | Charts of Interest

$UA on

Mead Johnson Details New Production Expansion In China

Mead Johnson Nutrition CO
announced on Monday that it plans on launching its new Enfinitas premium-priced product line in China.

Mead Johnson stated that it will begin rolling out its new product line “over the coming weeks.” The company added that its product is customized for the China market and contains Lactoferrin and Milk Fat Globule Membrane.

Mead Johnson added that it will provide additional information during its 2016 first quarter earnings conference cal

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$MJN clean momentum breakout with a profit target of $89.99. Needs to rest for a few days before the buy triggers.

(click the chart for a full view)

MJN 4-1-16

MJN 4-1-16

Stocks to Trade 4-1-16

Short-Term Trading Momentum:

Positive the last 20 and 5 trading days | closed 2% higher from the open: MDVN, ACAD, MPLX, SCTY, EGN, DVN, ETP, RH, HES, CLR

Negative last 20 and 5 trading days | closed 2% lower from the open: agn, vrx, mon, de

Quarterly Order Flow:


Bearish Stocks to Trade: de, mon, vrx, agn, cf, endp, esrx, lly, celg, vrtx, mnk

2x Normal Volume: VRX, POM, MDVN, ENDP, ACAD, CIT, GRUB

Inside days: aapl, yhoo, csco, intc, wfc, gm, cop, acag, aig, met, schw, v, hal, qcom, bmy, sbux, wdc, apc, abbv, cat, crm, rh, jblu, ntap, wynn, gs, stt, pru,

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