Today’s Trading Lesson…
How to Identify a Change of Trend
The most costly price action is a potential change of trend. This is where lazy traders go to die.
Their money is swallowed in pieces and they never see it coming. Price hardly moves but the trend is usually clear. We don’t notice the “box” until it’s too late. The box is the potential change of trend.
Volume during the box gives clues to the next move. A heavy volume pause is accumulation or distribution, a light volume pause indicates a continuation.
The key to avoiding a slow painful draining of your account is to recognize the box as early as possible. The trade here is to do nothing. Let your stock and the algos dance your stock in circles until a real buyer or seller decides to come out of hiding.
Can you trade support and resistance within the box? Sure. Do I recommend it? No.
There are most likely better trades with clear room to go.
On the Tape Today...
$NKE relative strength on a weak day. Solid $60 breakout. Buy stop above $60.33, target is $62.50 (see chart)
$CELG heavy volume momentum day lower is a change of trend. $110 sell stop with a $108 target.
$UNH breaks long-term uptrend below $140 with signs of distribution. Tighten trailing stops.
$NCLH short sale below $37 still in play with an ultimate target of $30
$NKE 8-25-16 (Click to Enlarge)
Wall Street set for losses as Yellen speech draws closer
Investors are waiting for just one thing: Fed chief Janet Yellen. U.S. stock futures dropped on Thursday, with investors staying cautious as the closely watched summit of central bankers in Jackson Hole got ready to kick off.
Federal Reserve Chairwoman Janet Yellen isn’t speaking at the meeting until Friday, but financial markets have been lackluster all week in anticipation of what she might say about the path of interest rates.
All eyes on Jackson Hole: But the main event on Thursday is the first day of the economic symposium hosted by the Kansas City Fed in Jackson Hole, Wyo. Central bank boss Yellen will speak on Friday at 10.a.m. Eastern Time, and markets are likely to remain becalmed until then, analysts said.
Stock Market Today: Heatmap of the S&P 500
Stock Trading Today 8-25-16 | $TIF Earnings
Stocks End Lower; Mylan Falls Amid Drug-Pricing Furor
Stocks fell Wednesday as a sell-off in gold, silver and crude oil battered mining and energy shares. Generic-drug maker Mylan (MYL) fell sharply for a second day.
$TIF reports earnings before he bell.
After the close, Workday (WDAY), a developer of cloud-based software for human resources applications, rose more than 3% after its quarterly earnings report.
HP Inc. (HPQ) dropped more than 4% following its quarterly results after the close. The stock hit a new high intraday before reversing lower and ending down 1% during the regular session.
In the stock market today, Mylan fell more than 5% in heavy volume amid mounting criticism over huge prices increases for allergy drug EpiPen.
Tape Reading the SPY ETF
$SPY gave up ground on Wednesday. Everybody off the ledge.
This is normal price action. With Janet Yellen speaking tomorrow, one week to Labor Day and a stock market that has not had a meaningful decline in months, this was overdue.
The correct bias remains long. But…
If your strong stocks trade below the open, don’t try to be a hero getting size. If you spot a solid long, bid and get feedback before you go big.
Stocks in Play: $TIF research on finviz.com
$TIF Earnings NEWS: Did You Get A Robin’s-Egg Blue Box in Q2? Tiffany Results Offer Insight
When Tiffany & Co. released its Q1 results last quarter and spoke to analysts on a conference call, it set the bar relatively low. Have the reduced expectations panned out or have luxury jewelers managed to restart sales in the last quarter?
Tourism, which typically powers the cash registers at hot TIF flagship stores in New York, Los Angeles, and Chicago, for example, had been lagging as the dollar strengthened, TIF said. Meanwhile, the strong dollar was also a drag on the bottom line because of currency fluctuations amid TIF’s strong sales abroad.
Domestic sales were sluggish too, TIF said, as the consumer pulled back.
Will This Earnings Report Be a Turning Point for Tiffany ($TIF)?
Tiffany & Co. (NYSE: TIF) is scheduled to report its fiscal second-quarter results before the markets open on Thursday. Despite having a relatively weak performance so far in 2016, this could be the turning point for this jewelry retailer.
Looking at other high-end retailers, most have seen a solid gain over the summer, especially after they reported earnings. Will this trend continue on to Tiffany?
The consensus estimates call for $0.72 in earnings per share (EPS) on $934.74 million in revenue. The same period of last year reportedly had $0.86 in EPS on revenue of $990.5 million.
Stocks to Trade 8-25-16 | Thursday Edition
Short-Term Trading Momentum:
Positive the last 20 and 5 trading days | closed 2% higher from the open:
Negative last 20 and 5 trading days | closed 2% lower from the open: nem, aem, wynn, acad, myl, agn, prgo, x, lvs, apc, car, teva, nclh
Quarterly Order Flow:
Bullish Stocks to Trade: EOG, SWKS, PXD, JWN, AVGO, CLR, HOG, LRCX, BABA, SM
Bearish Stocks to Trade: prgo, teva, nclh, dish, fslr, mcd, dis
2x Normal Volume: BBY, MYL, TEVA, LDOS, LMT, WYNN, DLPH, CXW
Inside days: tol, ccl, de, cmcsa, amat, dd, clr, rrc, dhi, wmb, sm, jpm, ctrp, dvn, dow, apa, mur, m, kss