Today’s Trading Lesson…
Reminiscences of a Stock Operator | Ch.1 Pg. 11
Tape reading is not as popular as it was in the old days. Computers have taken care of that.
Savvy traders have adapted and are skillfully implementing tape reading in a much different way today. Chart reading is one method. Another technique is interpreting news and volume traded off the news.
When I say the old days, I am referring to 2007. This is when the NYSE expanded to allow increased amounts of electronic trading. (More on this at the end of the article)
Traders would read the ticker tape (invented by Edward A. Calahan, updated by Thomas Edison) to determine the recent buying and selling pressure. It was much easier to spot a large buyer or seller because daily volume was incredibly light so it was easier to spot a big player.
The down side to light volume was liquidity. It could be difficult to exit a trade at a reasonable price.
On the Tape Today...
$X profit-taking the previous two days sets up a new long on a lower open today. Trend line support in the $35 area gives us the first place for a limit order. Stop -loss below the $34 with a target to sell of $38.75 (see chart)
$AEM broke the four week trading range and the $40 level with volume. This triggers a new short-sale with a target to cover at $35.50. New entry a $38 sell-stop.
3 Reasons the Donald Trump Stock Market Rally Will Continue
The stock market’s Trump bump rally is still pumping. If it were to continue at that pace for the next year, stocks would be up another 18,000 points by Christmas 2017—roughly double where the market is right now.
On Tuesday, Bill Gross, the so-called Bond King, said Trump’s trade policies were sure to short-circuit parts of the economy and the market, and that his spending and tax plans will create more debt that will hurt long-term growth for years to come.
Last month, a top Goldman Sachs strategist, Charles Himmelberg, predicted that the S&P 500 will end next year at 2,200, 40 points below where it is now.
But while an 18,000-point rise is not likely, it is plausible to expect that Trump’s incoming presidency could continue to keep pumping the market, at least for now.
Here are three reasons why:
Carl Icahn: Trump stock market rally has ‘gone too far’
Even Carl Icahn, one of President-elect Donald Trump’s biggest cheerleaders on Wall Street, thinks the post-election exuberance in the stock market has gotten a bit out of hand.
“It’s gone too far,” Icahn told CNN’s Poppy Harlow on Friday by phone, while noting that it’s always hard to time the market.
Stock Market Today: Heatmap of the S&P 500
Stock Trading Today 12-12-16 | FOMC This Week
Stocks Sail Quietly Higher As Market Sets Up For Fed Vote
The market wrapped the week on a positive note, ahead of a week likely to be dominated by the Federal Open Market Committee’s two-day policy meeting.
That meeting ends with a policy announcement Wednesday afternoon that’s expected to include an increase in interest rates.
On the Dow, Pfizer (PFE), Coca-Cola (KO) and Merck (MRK) led the session with gains of better-than 2% apiece. Caterpillar (CAT) lagged the index with a 0.7% decline.
Drilling contractors Diamond Offshore (DO) and Ensco (ESV) led the S&P 500, up 8% and 5%, respectively.
Continue Reading on investors.com
Tape Reading the SPY ETF
$SPY traded a respectable 80 million shares on Friday.
Lower than the 100 million I prefer to get a relevant reading, but considering the bullish rally, it’s impressive.
The one sign we don’t see? Exhaustion. The stock market continues to close higher with reasonable volume. No exuberance.
At least not yet.
I hate to use the word “feel” when it comes to trading because I like everything repeatable. You can’t repeat a feeling (It sounds good, but I wouldn’t stake my money on someones feeling). Despite the rally, the stock market doesn’t feel, “heavy.”
What we do have though, is five consecutive day of “well-bid” price action. Day six could be well-bid as well, but normally produces an indecision candlestick. (a candle with a small body, a close near the open.
Be smart if you’re swing trading. The last month of bullish momentum was a gift. You don’t need to squeeze every dime out of this trade. I am not saying get out, continue to trail, but have a trailing stop in the system.
Be prepared. Don’t let your profit taking decision be an emotional one.
Stocks in Play: $BA research on finviz.com
Boeing (BA) News: Boeing, Iran Air Sign $16.6 Billion, 80-Jet Deal; Airbus On Tap
Boeing (BA) will sell Iran Air 80 jets worth $16.6 billion at list price, the aerospace giant’s first such deal since Iran’s Islamic Republic took power in 1979.
The deal includes 50 737 MAX 8s, 15 777-300ERs and 15 777-9s, Boeing said on its website Sunday. The actual price is likely less than $16.6 billion, because deals are typically discounted from list prices.
Boeing had reached a Memorandum of Agreement with Iran Air announced in June. The U.S. government gave the green light to a deal in September.
Boeing’s European rival Airbus (EADSY) in January provisionally agreed to sell 118 planes to Iran Air in a deal valued at around $25 billion at list prices. An Airbus-Iran Air deal will be completed within a few days, an Iranian official told Reuters.
Read More on investors.com
Could Boeing Co. Hike Its Dividend by 30% or More?
It’s getting close to mid-December, which means that Boeing (NYSE:BA) shareholders could soon be getting some good news about the aerospace giant’s capital return plans. Since 2013, Boeing has more than doubled its dividend payout through a series of big dividend increases each December.
Last year, Boeing increased its quarterly dividend by about 20%, from $0.91 to $1.09, boosting its annual yield to a little more than 3%. Some analysts think that Boeing could be even more aggressive this year, raising its dividend by 30% or more.
Let’s see whether Boeing is likely to delight income investors with a big dividend increase like this.
Read More on fool.com
Stocks to Trade 12-12-16 | Monday Edition
Short-Term Trading Momentum:
Positive the last 20 and 5 trading days | closed 2% higher from the open: ADNT, ALXN, MOS, BMY, CAH, ABC, AA
Negative last 20 and 5 trading days | closed 2% lower from the open: aem, twlo, nem, wmb, mbly, ua, lvs
Quarterly Order Flow:
Bullish Stocks to Trade: UAL, COP, ADNT, AAPL, COST, ACN, BHI, BA, IBM, CMA, CVX, UNH, RCL, JPM, PNC, GS, MAR, COF, URI, DE, AET, UNP, PRU, VLO, PCAR, CAT, ADSK, WDC, JWN, NUE, KMX, KSS, X
Bearish Stocks to Trade: aem, twlo, crm, mnk, amt, trip
2x Normal Volume: RH, LVS, FNSR, HZNP, WYNN, AVGO
Inside days: bac, lvs, c, mgm, kmi, wynn, sbux, cvs, fitb, aig, nke, gs, hrb,, bby, mas, mbly, cof, de, dhr, hon, cbg, ntap, jwn, pnc, axp, ma, mnst, amzn