Today’s Trading Lesson…
Candlestick charts have a rich history and massive glossary of terms and definitions. (Thank you Steve Nisson)
I like to keep it simple. In my world there are only 3 central candlesticks:
The “BEARISH U-TURN” gives us one of the most powerful candlestick reversal patterns. Scroll down and look at the $SPY chart and you see this candlestick in action.
- U-Turn candlesticks display a potential change of short term momentum.
- Much like a melted candle, look for the U-Turn after:
two or more consecutive higher highs or lower lows.
- The more consecutive candles involved, the more potent the reversal will be.
- U-Turns are a very effective entry and exit pattern because they trap many participants on the wrong side, this is why we named it U-Turn.
On the Tape Today...
$AAPL 11-21-16 (Click to Enlarge)
$AAPL bulls sending a lot of emails recently looking for a reason to hod the longs. The short-term trend shows us a bearish tape and relative weakness to the recent bullish momentum. Is that reason enough to abandon the longs? No. Not yet. The chart clearly shows $111 as the reference point. The next energy candlestick away from this price gives a better picture. If you don't own it already, there is little edge. Be patient for the move. (see chart)
$KMX recent momentum and subsequent bull flag chart pattern gives a long opportunity. Looking for a lower open to find buyers. $56.75 target to sell for a two day swing trade.
$CAT bull flag remains in play looking for intra day confirmation. the last 3 trading days gives you a solid lesson in trading the open price indicator. A bullish stock with intra day selling is one to avoid, Do not buy a strong stock with current selling. The last price relative to the open price gives you a signal to trade or not trade. If CAT trades above the open price today look for an entry trigger.
$UA remains weak in a strong tape. The long-term charts show $30 support, with minor support at $28.50. Monitor for momentum volume through these levels to set up the next short-sale. The ultimate target of $23 for a swing trade to cover. Do not enter early, $30 is formidable support.
#Monday Motivation | Wake Up
Wall Street stocks set to struggle for direction in a holiday-shortened week
Speech from Fed’s Fischer among the Monday highlights
Stock futures indicated a cautious start for Wall Street on Monday, with a speech from Federal Reserve Vice Chair Stanley Fischer likely to draw attention as investors search for direction in a holiday-shortened week of trading.
Away from stocks, oil prices rallied on hopes for a production-cut deal this month, while the dollar appeared to step back from its run higher.
A pause for reflection could come in a week where volume traditionally thins out as traders head out for the Thanksgiving Day holiday. Markets will shut Thursday and then close early on Black Friday, the traditional kickoff to holiday shopping.
Continue Reading on marketwatch.com
== >> How Trump’s latest potential hires could send the stock market ‘through the roof’
Mike Pence dusted himself off from his “Hamilton” outing long enough to confirm on Sunday that Mitt Romney is a top candidate to serve as Donald Trump’s secretary of state. If Jim Cramer has it right, handing that title over to Mr. 47% could give the stock market a nice pop.
Why? Because it just might mean Trump is more savvy about foreign policy than some/many people might think.
For traders looking to scalp profits by timing Trump appointments — good luck with that — CNBC’s human bullhorn shared this tip:
“A name-brand, Wall Street-friendly Treasury secretary, on top of tabbing Romney for state, would send this market through the roof … that is, if there even is a roof.”Read More >>
Stock Market Today: Heatmap of the S&P 500
Stock Trading Today 11-21-16 | CVX Remains Strong
Stocks Drift Lower In Quiet Session; Chevron Leads Dow, Dollar Up Again
Stocks were mildly lower in late-afternoon trading Friday ahead of a shortened week of trading next week due to the Thanksgiving holiday.
Chevron (CVX) outperformed in the Dow, rising 1.3%. Merck (MRK) and Procter & Gamble (PG) lagged with losses of 1% and 1.4%, respectively.
In addition to Chevron, other oil and gas producers outperformed. Devon Energy (DVN) jumped 3% to 44.20. Its current consolidation shows a 45.72 buy point.
Ross Stores (ROST) led the Nasdaq 100, rising nearly 4%. Late Thursday, the company reported its second straight quarter of accelerating earnings and sales growth. It’s still in buy range from a 66.38 buy point.
Nasdaq 100 component Western Digital (WDC) wasn’t far behind, rising 3%. It’s been showing supporting action at its 10-week moving average after a recent breakout over a 54.66 buy point.
After a soft start, Applied Materials (AMAT) was up 0.5% to 30.89 in late trading on strong earnings. The chip-equipment maker was poised for its sixth straight gain but is still in buy range from a 31.17 buy point.
Continue Reading on investors.com
Tape Reading the SPY ETF
$SPY produced a “bearish u-turn” candlestick on Friday.
Trading volume printed a below average number but we can’t ignore the reversal and close near the lows. The Trump effect remains intact and the stock market is due for a pause.
A holiday shortened week is the perfect opportunity.
A 50% retracement, the standard fibonacci number to gauge the recent strength of either momentum or a trend, is in the $213.50 area. Given the bullish enthusiasm I doubt we will trade that low, the $215 level seems to be more realistic.
If you’re not familiar with the simplicity of using a fibonacci retracement, here you go:
50% represents a price level that “should” hold a pull-back, to validate/confirm the previous move in price action. So if a stock trades from $10-20, (a $10 move), the 50% level is $15.
You should look for an entry signal at or above the 50% level, in this case $15. An entry signal above that levels indicates strength, a decline below that level indicates a weaker than anticipated advance.
Stocks in Play: $AMZN research on finviz.com
AMZN NEWS: Amazon partners with Fiat Chrysler to sell cars online in Italy
Amazon continues to show interest in the auto industry.
The tech giant will sell vehicles in Italy via a new partnership with Fiat Chrysler, Reuters reported. Italian buyers will be able to purchase three Chrysler models — the 500, the Panda and the 500L — on Amazon with an “additional discount,” Reuters noted.
Amazon will contact buyers after they click online and help them finalize the purchase at a physical dealership. It’s not clear if Amazon has its own inventory of vehicles. The entire process takes two weeks, Reuters reported.
Read More on geekwire.com
Amazon is going to sell cars online
Amazon has partnered with Fiat Chrylser to sell cars online for the first time, showing the company’s growing ambition to go after the $1.2 trillion auto sales market.
According to Reuters, Fiat Chrysler will sell three models — the 500, the 500L, and the Panda — on Amazon’s Italian site at a price that is up to 30% cheaper than other dealerships. The service will only be available in Italy.
Continue Reading on businessinsider.com
Stocks to Trade 11-21-16 | Monday Edition
Short-Term Trading Momentum:
Positive the last 20 and 5 trading days | closed 2% higher from the open: NTNX, CF, YUMC, WDC, ETP, COP, YELP, RH
Negative last 20 and 5 trading days | closed 2% lower from the open: gps, fslr, lulu, ua, agn, atvi, myl, tsla
Quarterly Order Flow:
Bullish Stocks to Trade: WDC, NVDA, UNP, CVX, LRCX, BA, PRU, UAL, PNC, COF, GS, KSS, RCL, STT, CELG, JPM, CAT, BHI, UNH, NUE, AET, WNR, IONS
Bearish Stocks to Trade: fslr, lulu, agn, hca, tsla, amgn, aem, mdt, mck, teva, fb, nee, amt, khc, trip, cvs, pm, cci, htz, hcn
2x Normal Volume: GPS, CRM, ATVI, BBY, AGN, WNR, NLSN, FSLR, ROST, LNG
Inside days: c, t, intc, x, nvda, bby, wmt, cop, nem, fslr, bmy, wmb, cvx, hal, teva, tgt, oxy, wba, dvn, jci, cern, dhi, apc, ma, apa, mbly, aet, gpor, dd