Today’s Trading Lesson…
An introduction to Order Flow…
Order flow isn’t a term you will hear on CNBC or read in the Wall St Journal…
It’s an underground secret, exposed only to those in contact with big money. When tens of millions of shares are involved, order flow is not going to be announced on TV.
That is unless they want you to buy shares they need to sell, or, they want to accumulate (buy) a few million shares and need you to sell to get the shares.
How do they do that? It’s simple. It’s done with a specific type of price action…
What attracts the attention of retail investors? Higher prices. More specifically, fast-moving higher prices. Said through the lens of technical analysis, higher prices with wide fluctuations after a significant move higher.
The “fluctuations” part is what makes the retail buyer think he has a second chance at a better price.
So we are clear, a “sloppy/whippy” topping pattern (after a mark up/up trend), is when institutions are marketing stock for sale. They are telling you they need to get out, and they are attracting you like moths to a street light with price action.
On the Tape Today...
$LMT 11-18-16 (Click to Enlarge)
$LMT inside day bull flag, at resistance-classic technical chart pattern. All signs point to a 3 day momentum move higher. Yesterday's high a buy-stop first entry, add over $286. If the stock price trades back below $266 most likely a failed breakout. (see chart)
$DHI solid selling order flow and topping tail candlestick. Looking to short-sell a breakdown of the first 30 minute candle. $27.50 target to cover.
$NKE showing signs of accumulation and an attempt to break the selling order flow that began in August. $52.75 buy-stop triggers the new swing trade long with an initial target of $55.50.
$MA continues to offer a tremendous lesson in technical analysis. A smooth, obvious trend in buying order flow which began in July has smashed into a perfect chart of distribution. The chart should be printed and place on your wall.
Why Do We Fall | Motivation
Oil stumbles on dollar strength, lack of faith in OPEC output deal
Oil futures edged lower Friday with volatility expected ahead of a meeting later this month of major oil producing countries aiming to strike a deal to cut output and stabilize prices.
Members of the Organization of the Petroleum Exporting Countries, which controls over a third of the world’s oil, are scheduled to meet Nov. 30 to try to agree on output quotas, although it is likely to be a challenging task, with some requesting exemptions.
The market is particularly sensitive to statements coming out of Doha this week, where ongoing talks between OPEC members on the sidelines of a gas forum were expected to give some indication of progress toward […]
Continue Reading on marketwatch.com
Stock Market Today: Heatmap of the S&P 500
Stock Trading Today 11-18-16 | All-Time Highs
Stocks Up, Best Buy Soars, Planet Fitness Cools; Can Apple Break Out Again?
The Nasdaq composite led a broad advance in stocks on Thursday despite a big drop by former tech leader Cisco Systems (CSCO). Volume was mixed.
Meanwhile, Apple (AAPL) showed resilience, giving back less than 0.2% after surging more than 2% on Wednesday. At 109.94, the biggest company by market value on either major U.S. exchange is still an arm’s length away from potentially staging a re-breakout past a 110.33 cup with handle in a long bottoming base.
Nvidia (NVDA) continued its market-leading ways, but it cooled off a bit after rising to a new high of 94.79. The fabless designer of sophisticated chips to handle video graphics, machine learning and other data-intensive activity finished up 0.7% to 92.28.
Perhaps the excellent gain by Best Buy (BBY) is a good omen, since Apple sells a ton of iPads, Macbooks, and iPhones at the leading consumer electronics retail chain. Best Buy soared more than 14% to 46.34 in nearly five times normal volume following a 51% leap in fiscal third-quarter earnings to 62 cents a share, pounding views by more than 30%.
Continue Reading on investors.com
Tape Reading the SPY ETF
$SPY “inside day” breakout chart pattern (see scans at bottom of the blog), provided another solid trading opportunity.
All major indices continue to steam ahead, The NASDAQ remains the sole laggard. The DJIA, IWM, IYT, have cleared breakout levels and have room to go.
Fear of buying too late dominates the chats in my coaching calls. Those traders looking to pick a top the last week remain frustrated and a little lighter in the wallet.
The correct trade to game plan remains long, with a healthy dose of discipline. Look long but place your stops and don’t “move them a nickel.”
Stocks in Play: $SCTY research on finviz.com
$TSLA-$SCTY News: Tesla and SolarCity Shareholders Approve Merger
Shareholders approved the Tesla Motors Corp. (TSLA) and SolarCity Corp. (SCTY) merger this evening paving the way for Tesla CEO Elon Musk to realize his ‘Masterplan’ of building a vertically integrated solar company.
“Excluding the votes of Elon and other affiliated shareholders, more than 85% of the votes cast today were in favor of the acquisition. With SolarCity’s shareholders also having approved the acquisition, the transaction will be approved in the coming days,” the company stated in a release to television network CNBC.
The merger also clarifies the production status for solar roofs that Musk unveiled earlier this month.
Read More on investopedia.com
Shareholders approve $2.1 billion Tesla-SolarCity merger
Shareholders of Tesla Motors Inc. and SolarCity Corp. approved Tesla’s $2.1 billion all-stock offer to merge and create one company headed by Elon Musk that would sell emissions-free cars and solar panels that help power them.
In combining Tesla TSLA, +0.19% and SolarCity SCTY, +2.90% , Musk, who is chief executive officer of Tesla as well as chairman and largest shareholder of both companies, aims to combine them to create an integrated clean-energy company. Some critics have characterized the merger proposal as a bailout by Tesla of SolarCity, which has struggled financially.
Continue Reading on marketwatch.com
Stocks to Trade 11-18-16 | Friday Edition
Short-Term Trading Momentum:
Positive the last 20 and 5 trading days | closed 2% higher from the open: BBY, CLVS, UAL, MBLY, PNC, YELP, CRM, LRCX, SWKS, AET, DLPH, ABC, CELG, IONS, DLTR
Negative last 20 and 5 trading days | closed 2% lower from the open: htz, aem, eog, dvn, momo
Quarterly Order Flow:
Bullish Stocks to Trade: WNR, BBY, UAL, PNC, LRCX, AET, CELG, IONS, COF, VLO, GS, PRU, KSS, AKAM, PSX, NVDA, STT, JPM, RCL, JWN, URI, BHI, MAR, CVX, UNH, CAT, NUE, BA,
Bearish Stocks to Trade: fslr, twlo, htz, aem, tsn, nem, vtr, hcn, cvs, mck, cci, nee, khc, mdt, trip, fb, pm, teva, agn
2x Normal Volume: CSCO, RF, WNR, BBY, WMT, NTAP, FSLR, CERN, SCTY, TSO, DDR, NBL, MENT, TSN, COMM
Inside days: fb, low, kmi, gsk, aig, jnj, amgn, axp, mnst, ua, dfs, hig, aep, nee, mon, acia, acad,