Today’s Trading Lesson…
Trading Plan Template
A trading plan is an outline successful traders use to keep focused on decisions with a high probability for profit. The trading plan also eliminates trading scenarios that do not meet your edge.
The outline consists of two core components:
- The trading system, method or process that defines your trading edge, which includes buy or sell signals.
Money management and risk management parameters that match your skills and resources.
- Finally your trading plan includes which markets (or securities) to trade, your goals, your emotional characteristics and then chooses a trading style.
On the Tape Today...
$TSO setting up a $90.75 buy-stop with a $93 target to sell. $93 is a clear double top and significant resistance but that doesn't negate the trade, the risk/reward justifies the scenario. If the buy-stop price does not trigger I am letting it go. (see chart)
$JWN breakdown through support validates new order flow, especially after the gap lower and the failed breakout. A $48 sell-stop triggers a swing trade short and a target to cover just above the next support which comes in at $44.
Stock Market Today
U.S. and China on Collision Course
China’s capital and currency markets are on a collision course with the U.S., and by extension, the entire world. Economists are fond of saying if something can’t go on forever, it won’t. That truism applies to China.
Gold Heading for Longest Run of Losses in More Than a Year
Gold headed for its longest run of losses in more than a year as expectations of a faster U.S. interest rate tightening cycle spur investors to sell holdings in funds backed by the metal. Prices are set for a seventh weekly decline, the longest stretch since August 2015, after the U.S. Federal Reserve indicated it may raise interest rates three times in 2017.
The Traditional “2 & 20” Fee Structure Is Taking A Hit As Hedge Funds Continue To Underperform
Nearly a decade ago, Warren Buffett bet Protege Partners, a fund of hedge funds, that over the course of 10 years the S&P would outperform Protege’s returns net of all fees, costs and expenses. To make it real, the loser agreed to pay $1 million to the charity of the winner’s choice.
Stock Exchange: Successful Trading Depends On Discipline And Focus
Last week’s Stock Exchange was about how emotion and symbols affected technical analysis. Could our charts help us when the picture displayed involved some psychological event like Dow 20K? This week I turn from the charts themselves to the trader who must interpret them. Successful trading requires focus and the discipline to stick with successful methods – even through a bout of bad luck.
Stock Market Today: Heatmap of the S&P 500
Stock Trading Today 12-23-16
Retailers Sink, Apple Cools Off; Why Nvidia And Its Industry Peers Are Up
Investors showed less cheer amid a broad decline, but most of the major indexes shaved losses by Thursday’s close. Volume grew on both main exchanges, according to preliminary data.
Retailers paced the decline on a negative report from the influential market research firm NPD that pointed to lower retail sales during the holiday season vs. the same time a year ago. News that President-elect Donald Trump is mulling a sizable tariff on imports certainly did not dampen concerns.
Department store chain, discount and variety store chain, home furnishings, apparel and shoes and specialty retail groups all slid more than 3% for the day. Auto retailing, leisure products and jewelry stocks also got battered.
Meanwhile, Nvidia (NVDA) kept its two-week stretch run intact, getting as high as 108.87 before finishing the day up 1.2% at 107.10 — up more than 220% since shares bolted out of a second-stage cup with handle in mid-March at 33.17.
Apple (AAPL) dropped to as low as 115.64 before edging back to cut the loss to a reasonable 0.7% at 116.22.
Five Dow 30 components, including integrated oil major Chevron (CVX), 3M (MMM) and Verizon (VZ), rose half a point or more to buffer the index’s slide. But the Russell 2000 sank 0.9%, now on pace for a slight decline for the week.
Read More on marketwatch.com
Tape Reading the SPY ETF
$SPY trading range tightens and the volume vanishes…
These are the days we lose too much much money. Traders tend to get frustrated when the stock market is slow and lacks volatility, but that’s the wrong focus.
It’s wrong for two reasons.
Number one, be patient and trade nothing but your strategy. You shouldn’t get frustrated if your strategy doesn’t identify any trades. That’s the very definition of why you accept risk. If a trade is hard to find, it’s not there.
Number two should bother you more. Why didn’t you earn the max on good trades? Your focus needs to be on that topic.
Small losses and trendless days can’t be avoided, but holding the winners, that’s another topic completely. And it’s in your control.
Spend some time before the end of the year reviewing your trading decisions during the 6 week rally since the election.
Your extra trading income is lost in there somewhere.
Trump’s tweet pits Boeing vs. Lockheed in fighter battle
President-elect Donald Trump on Thursday continued his pressure on the defense sector by suggesting he could use a Boeing Co. plane as a substitute for the Lockheed Martin Corp. F-35 combat jet.
“Based on the tremendous cost and cost overruns of the Lockheed Martin F-35, I have asked Boeing to price-out a comparable F/A-18 Super Hornet!” he said in a tweet, referring to a Boeing plane that has long been used by the Navy and some overseas allies.
The Pentagon plans to acquire more than 2,400 of the F-35 jets to replace much of its combat fleet in what is by far its costliest program, and Trump has singled it out for criticism after a legacy of delays and design problems.
Continue Reading on marketwatch.com
Boeing responds quickly to Trump’s tweeted request for F-18 quote citing Lockheed cost overruns
The Boeing Co. said Thursday it’s “ready to work” with President-elect Donald Trump’s new administration to “affordably” provide whatever the U.S. military needs.
Chicago-based Boeing (NYSE: BA) issued that terse statement on Twitter not long after Trump said on his own Twitter account that he personally asked Boeing to give him some price information to supply F-18 Super Hornet combat fighters to the U.S. military, a request he made “based on the tremendous cost and cost overruns of the Lockheed Martin F-35.”
Read More on bizjournals.com
Stocks to Trade 12-23-16 | Friday Edition
Short-Term Trading Momentum:
Positive the last 20 and 5 trading days | closed 2% higher from the open: ALXN, CF, ETP, LW, MPC
Negative last 20 and 5 trading days | closed 2% lower from the open: dks, rh, jwn, dltr, kss, wb, srpt, tgt, dg, lb
Quarterly Order Flow:
Bullish Stocks to Trade: WDC, NVDA, VLO, CVX, SLCA, OXY, HES, UNH, APC, IBM, PNC, TRGP, GS, COST, PRU, IONS, RCL, COF, UAL, CLVS, KMX
Bearish Stocks to Trade: jwn, dltr, lb, baba, vrtx, crm, aem, rrc
2x Normal Volume: BBBY, TWLO, ETP, DLTR, DKS
Inside days: nke, dis, nem, nflx, cog, rai, pm, mtl, lvs, unh, apc, ccl, gis, mnst, nue, ea