Today’s Trading Lesson…
Most traders struggle because they focus on profits…
Since 2000, I’ve had the opportunity to trade full-time, manage and teach thousands of professional traders across the world. One constant theme I see among losing traders is the need to be right on each trade.
In my coaching I hear “This trade in $XYZ didn’t make money. The idea matched my trading plan perfectly. What did I miss?”
These traders don’t understand the business. We spend months and years developing systems, an edge, but then we “eff” it up by looking for profits on each trade.
A “system,” and “edge” literally means “over a large sample!!”
We mess it up focusing on the profitability of each trade. Focus on your discipline trade-by-trade, but focus on your results over time (or a large sample, such as 50 trades).
A side note, when you get to this point trading becomes stress free because you are trading your plan not the market.
On the Tape Today...
$CVX held $100 support and ready to test 52 week highs. After the recent momentum, expect it to pause near $107, then make a run at the $112 target to sell. (see chart)
$HD and $LOW trading below key support. $HD shows more "room to go" profit potential. Minor gap fill support at $116 then cover to buy at $110.50
$JPM nearing 16 month highs and we don't see any signs of distribution. A pause near $70 sets up a swing trade long to the $83 area. Could change of course if the FOMC surprises today.
$QCOM bull flag off recent bullish momentum sets up a limit order to buy @ $68 with a target to sell @ $71.
$CVX 11-2-16 (Click to Enlarge)
U.S. stocks under pressure as tighter election race rattles investors
U.S. stock futures fell Wednesday as investors, increasingly unsettled by the prospect of a tighter-than-expected presidential election, moved away from perceived riskier investments such as stocks and gravitated toward the traditional havens of gold and the Japanese yen.
Investors are also awaiting the outcome of the Federal Open Market Committee meeting, which concludes Wednesday, but that event appeared to be taking a back seat to U.S. politics.
“The post-Brexit vote market reaction is still fresh in investors’ memory, and no one wants to be caught on the wrong side of the trade,” Hussein Sayed, FXTM’s chief market strategist, said in a note on Wednesday.
“It will only take another one or two polls showing a Trump lead to boost markets anxiety and thus a steep sell off in equity markets and high beta currencies,” he added.
Continue reading on marketwatch.com
Stock Market Today: Heatmap of the S&P 500
Tape Reading the SPY ETF
$SPY price action cracked the magic $212 support. Look out below?
The $SPY chart shows minor support in the $207 area, after that the psychological $200 barrier. The stock market clearly doesn’t like the election tightening. Too much uncertainty now.
Wall Street likes clarity, we received the opposite a week before November 8th.
So the all-important question is how do we trade this? Well fear gives us volatility, as we witnessed yesterday. Unless you believe short-selling is un-American, yesterday provided a great day to trade.
$SPY ETF volume ticked above the 100 million share watermark, that’s the benchmark we teach to monitor. Above that level, price action “means something.”
Heavier volume and breaking a key support level gives bearish traders a reason to come out of the cave but, but don’t short with full size yet…
Trade for cash flow until we can make a call about order flow. Right now price action is day-to-day. Not enough to increase leverage.
Be smart. Watch the trend of the $VIX or $VXX. If they’re trending higher, hold the shorts, if they break trend, be smart and book your profits.
The last 90 minutes of trading yesterday was a good example of this discipline/planned trade management.
Stock Trading Today 11-2-16 | $FB Earnings After the Close
Stocks Drop As Fed Meeting Starts; Apple, Pfizer Biggest Losers On Dow
Stocks closed broadly lower Tuesday, after opening gains spiraled into big losses midway through the session. Buyers came back in the final 90 minutes, though. A 2% drop by Apple (AAPL) weighed on the major market indexes.
The Federal Reserve kicked off the first day of its two-day monetary policy meeting Tuesday. Traders don’t expect a rate hike until December. But all eyes will be on the Fed’s announcement due Wednesday at 2 p.m. ET.
Medical, paper and auto-related plays led the downside in the stock market today, while gold miners, generic-drug makers and cement stocks advanced.
Tesla Motors (TSLA) skidded 3.5% in fast trade to a four-month low as shares continued to consolidate below the 50-day and 200-day lines.
Watch Video & Continue Reading on investors.com
Stocks in Play: $FB research on finviz.com
$FB Earnings NEWS: Facebook earnings growth won’t stop: 70% profit jump expected
Facebook Inc. is expected to report a 70% increase in earnings thanks to strong sales and advertising growth when it reports third-quarter earnings after the market closes Wednesday.
Momentum in ad sales should come particularly from mobile ads, thanks to increased engagement. Facebook could face tough questions about misstated video metrics and an admitted “slow start” for sales of its Oculus Rift virtual-reality hardware, but big gains in profit and revenue are expected to drown out any doubts […]
Read More on marketwatch.com
What to Expect From Facebook’s Earnings
Facebook has put together an impressive winning streak. For 13 straight quarters, the company has reported better-than-expected earnings results. Over that three-year-plus period, Facebook shares are up a staggering 279%, more than 10 times the overall stock market.
Facebook’s earnings streak will be put to the test Wednesday when the company reports its third-quarter results. Investors, meanwhile, have grown slightly more skittish about Facebook’s global dominance.
In August, during Facebook’s last earnings call with investors, executives cautioned that the company’s runaway advertising growth is hitting a wall — essentially, the company is running out of space to run more ads […]
Continue Reading on barrons.com
Facebook, Inc. Earnings Will Bring Revenue Growth Into Focus
In recent quarters, Facebook (NASDAQ:FB) has absolutely crushed it when it comes to growing its top line.
But there’s good reason this growth won’t last. Indeed, the deceleration may have already started — investors will find out whether or not the growth rate is contracting when the social network reports quarterly results on Wednesday, Nov. 2, after market close.
One reason Facebook’s revenue growth is likely to decelerate soon is because recent astronomical growth rates are […]
Read More on fool.com/investing
Stocks to Trade 11-2-16 | Wednesday 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: ctl, oxy, etn, vtr, rrc, tsla, nclh, cah, kmx, jwn, yum, tn, ren, dhr, clvs, ua, acia, ip, lyb, ctrp, psx, dvn
Quarterly Order Flow:
Bullish Stocks to Trade: DAL, BA, PNC, GS, DE, UAL, HOG, NFLX, MA, AKAM, DISH, EXPE, NVDA
Bearish Stocks to Trade: rrc, cah, acia, hd, lly, dltr, cost, cvs, gpor, hon, mcd, amgn, esrx, bmy, agn, fh, gild, teva, mbly, abbv, mck, myl, prgo, twlo
2x Normal Volume: VRX, CTL, LVLT, OXY, MPC, YUM, BHI, PBF, ETN, LLY, MA, TSLA, EA, THC, CAH, AKAM, MCK
Inside days: xom, luv, jnj, myl, wba, gsk, peg, pe