Stock Market Gaps Dominate Recent Price Action 12-29-15

Stock Market Gaps Dominate Recent Price Action 12-29-15Day trading gaps are touted as one of the easiest methods to earn a living.

Easy to spot? Yes. Easy way to make a living, maybe.

Today the SPY is offering us a 5th gap in 7 days, unusual price action for an ETF that trades this many shares.

What does this mean and how should you plan to trade it? Multiple gaps in different directions means indecision, especially without an obvious trend. This means you should wait for the opening price action to give you a reference point. Generally that would be the open price, but for a gap that can quickly be too far away from an entry point to justify the risk.

I suggest using the opening ten or fifteen minute candlestick and trading the breakout or break down. You can think of this play as similar to trading a breakout from yesterday’s high or low, but only you are using the first ten minutes.

The probability of the trade improves as you continue in the direction of the breakout or breakdown, if it remains in sync with the change from the open as well.

Stock Market Today: Map of the S&P 500

(click the map for a full view)

Stock Market Gaps Dominate Recent Price Action 12-29-15

Day Trading Game Plan: The SPY ETF Outlook

SPY price action now producing the 5th gap in 7 days. If they were in the same direction that would be exciting. SPY set to open between the 20 ema and the 50 sma (on the daily chart, 7am), this is a neutral zone, no edge. Read the tape for a short-term bias, which means monitor where the last price is relative to the open price.

(click the chart for a full view)

Stock Market Gaps Dominate Recent Price Action 12-29-15

Pete’s Notes:

  • Day trading mode for most stocks.
  • Avoiding the financials for now, need to see an impulse move before a new trade.
  • Healthcare stocks showing a bid.

Technical Analysis | Charts of Interest

GOOGL Alphabet Inc. Class A

GOOGL resistance @ $780 challenged again yesterday. I like the long, but not until we get a pause above that level to prove the buyers are real.

(click the chart for a full view)

Stock Market Gaps Dominate Recent Price Action 12-29-15

 

Stock Market Gaps Dominate Recent Price Action 12-29-15

> 20sma | positive the last 5 days | closed 2% higher from the open: BOFI, TEAM

< 20sma | negative last 5 days | closed 2% lower from the open: dks, gpro, sm

Bullish Ideas ATR/Volume/Price: GOOGL, FB, DLTR, QUNR, ACE, NEE, ADBE, RLYP, FSLR, SCTY

Bearish Ideas ATR/Volume/Price: clr, hp, bhi, lng, thc, hes, dvn, apc, cop, pxd, cf, xon, nfx, gild, wdc, lyb, nsc, jwn, prgo, aapl, unp, cof, gs, ibm, wmb, ups, kmx, cmi, ua, dis

Weak Stock Weak Close: bhi, cyh, dks, do, hp, lng, mos, ncr, thc, trn

Strong Stock Weak Close: BXLT, JD,

Weak Stock Strong Close: cien, fti, slb

Strong Stock Strong Close: HCP, DRE, CMS, MSFT, CAH, ANF, XEL, KIM, GOOGL

20 day Breakdown: ctrp, dks, hfc, nflx

20 Day Breakout: AYMC, SO, GGP, AEP, KIM, HCP, LULU, CMS, CAH, VTR, HCN, BOFI, BIIB, ABC, QUNR

2x Normal Volume:

Watch List Longs: BMY, GE, MCD, MO, KO, PM, JNJ, MSFT, T, ADBE,

Watch List Short: bhi, cop, hal, ms, axp, cof, bk, slb, dis, ntap, m, tol, akam,

Inside days: nke, qcom, pep, cvc, bmy, low, ual, bbby, scty, dd, idti, ea, adsk

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