Today’s Trading Education…
Most traders don’t have criteria.
Actually I take that back. Most traders have criteria for entry signals and profit targets. But few have specific rules for quality.
“The real risk in a trade is the quality of the idea…”
A trader friend told me that in 2007. The quote became my mantra. It should become yours too.
We get so focused on the perfect entry. But what if the idea stinks? You found the perfect five minute bull flag in the middle of nowhere. How valuable is that entry?
The two charts below illustrate my point. $LMT shows one day of volatility. Prior to the gap higher, the stock price exhibited solid selling order flow. Yet many traders see this as a “great long.”
It’s not. It’s a one day momentum follow through trade. If you become a coaching student you would know this would be much further down your progression of stocks to trade.
There is great, and then you move down your list.
The second chart of $MA, shows two instances of solid buying order flow. February through April, and July through today.
Buyers show clear commitment. Until you can learn to read the tape, you will be P&L challenged.
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$MA Order Flow
On the Tape Today...
$LOW breakdown triggers a swing trade sell-short. Target to cover @ $63. Minor support @ $66. (see chart)
$AAPL earnings triggers selling but the chart remains in solid order flow. $112 support gives you a solid level to look for a spot to bid.
$MA solid order flow since July and remains above the psychological $100 level. Topping tails/hammer candlesticks @ $103. A strong close with volume above 103 triggers the long.
$UA gap lower into $33 support from January. Short sale below this level in play today.
$LOW 6-24-16 (Click to Enlarge)
Dow futures slide as Apple slumps after earnings
Coke, Boeing also set to grab the spotlight
Wall Street was set for a day in the red on Wednesday, with Apple posting one of the biggest premarket losses after a disappointing outlook for the current quarter.
A continued drop in oil prices also weighed, and investors waited for another round of results from big names.
The indexes were weighed down by a 3.3% premarket slide for Apple Inc. AAPL, -3.13% after the iPhone maker late Tuesday posted quarterly earnings that slightly beat expectations and revenue that was just shy of forecasts.
Corporate news: Earnings were also a major theme on Wednesday, with two Dow components — Coca-Cola Co. KO, +1.08% and Boeing Co. BA, +1.14% slated to report before the open.
Tesla Motors Inc. TSLA, -0.42% and Texas Instruments Inc. TXN, -0.67% are due to report after the market close.
Continue Reading on marketwatch.com
Stock Market Today: Heatmap of the S&P 500
Stocks to Trade 10-26-16 | $TSLA Earnings
Stocks Fall But Defense Contractors Up Big; Apple Slips After Hours
Stocks retreated on Tuesday during a session dominated by heavy selling in the homebuilding sector. The action indicated a continued shift in stock sector strategy among institutional players as interest rates look set to rise a little more by the end of the year.
Sherwin-Williams (SHW) gapped down more than 10% to 247.59 as volume ballooned to nearly 6 million shares, easily the heaviest turnover so far this year. The paint giant posted a 7% rise in earnings per share to $4.23 a share, the smallest increase in 11 quarters and missing the Thomson Reuters consensus view of $4.32.
On the upside, defense stocks rallied on the back of positive results from fighter jet and battle systems supplier Lockheed Martin (LMT). Shares bolted more than 7% to 249.26 […]
Meanwhile, Apple (AAPL) gained 0.5% to 118.25 in the regular session but fell nearly 3% to around 114.75 in after-hours trade following mixed fiscal Q4 results.
Continue reading on investors.com
Tape Reading the SPY ETF
$SPY taking cues from the election and flip-flopping it’s bias.
Price action moved from “well-bid’ to “well-offered” in three days. Set to open lower this morning off $AAPL earnings. This means the $212 support becomes the price to watch for potential buyers.
Trading volume clocked in below average but “change from the open” was clear. Sellers ruled the day despite the positive change from the previous close.
The trade to make this morning is off the first rally in prices. Difficult to expect a lower opening to follow through on the first push of the day. We tracked breakouts over the last few weeks, and most are failing. Such as $FB yesterday.
The smart play in the current tape: trade the first pull-back off the first momentum push.
Stocks in Play: $TSLA research on finviz.com
$TSLA Earnings NEWS: Tesla Earnings: The Moment of Truth
Tesla Motors has a low bar to hurdle in Wednesday’s earnings report as analysts have slashed estimates
Tesla Motors Inc. Chief Executive Elon Musk raised the ante for third-quarter results. Analysts have been lowering it ever since.
In a staff memo sent in late August and earlier published by Bloomberg, Mr. Musk pleaded with employees to slash costs and deliver “every car we possibly can” to show positive cash flow. He called it Tesla’s “last chance” to show investors it can be profitable before the Model 3 hits full production.
“It would be awesome to throw a pie in the face of all the naysayers on Wall Street who keep insisting that Tesla will always be a money-loser,” Mr. Musk wrote.
Continue Reading on WSJ.COM
Tesla third-quarter earnings: What to expect
Tesla Motors Inc. is expected to report third-quarter results on Oct. 26 — that’s about a week earlier than is customary.
One could forgive Tesla TSLA, -0.21% for wanting to be early: The electric-car maker most likely will have good news to share with investors, even as it has endured skepticism around its planned deal to buy solar-power installer SolarCity Corp. SCTY, -1.15%
Tesla is poised to report adjusted gains for the first time in two years. Not that investors could tell by looking at the way the stock has been performing — weighed down by the proposed merger, shares have been hovering around their lowest in more than six months.
Here’s what to expect: Read More on marketwatch.com
Tesla Readies Q3 Earnings Report During Tumultuous Time
Tesla Motors (TSLA) is set to report third-quarter earnings during a tumultuous period for the electric-car maker, including its much criticized bid to acquire SolarCity (SCTY) for $2.6 billion.
The electric vehicle maker reports after the close Wednesday, and analysts see it swinging to an adjusted profit of 4 cents a share after seven straight quarters of losses.
Revenue is seen surging 85% to $2.3 billion, as Q3 vehicle deliveries jumped 70% from Q2 to 24,500. Tesla expects Q4 deliveries to be flat to slightly higher than in Q3, but it faces unease from Wall Street about the company’s ability to successfully integrate SolarCity while ramping up Model 3 production next year.
Continue Reading on investors.com
Stocks to Trade 10-26-16 | Wednesday Edition
Short-Term Trading Momentum:
Positive the last 20 and 5 trading days | closed 2% higher from the open: LMT, VLO
Negative last 20 and 5 trading days | closed 2% lower from the open: nlsn, twlo, hd, gpor, trgp, ions, nue, stx
Quarterly Order Flow:
Bullish Stocks to Trade: NVDA, AAPL, AKAM, DISH, GS, EXPE, PNC, COF, MA, AMZN, SWKS, UNH, NFLX, FB, UAL, WNR, HOG, HAL,
Bearish Stocks to Trade: ua, twlo, low, gpor, rh, lulu, ions, kmx, mcd, rrc, acad, celg, agn, hon, vfc, mbly, gild, bmy, teva
2x Normal Volume: UA, NLSN, TWX, SPN, RAI, TMUS, CAT, BHI, LLY, UTX
Inside days: baba, bk, gild, mo, jd, mcd, cf, crm, kr, wy, pep, slw, wba, mur, ccl, gis, cag